Enhanced annuity and equity release provider Just Retirement has attributed a downturn in underlying operating profit and new sales to business “pulled forward” into 2012 by the Retail Distribution Review and gender-equal pricing.
In its first set of results since its listing last year, Just Retirement reported an operating profit before tax of £40.7m for the six months ending 31 December 2013, up 11 per cent on the same period in 2012.
However, underlying profit of £47.3m was down 7 per cent year-on-year. Total new business amounted to £906m, down 4 per cent.
Annuity sales dropped 14 per cent to £688m, which the company stated reflects the impact of gender neutral pricing and the RDR and pointed out represents growth of 15 per cent per annum since 2011.
New equity release lifetime mortgage business continued its rapid growth of recent years and bolstered 2013 figures with a rise of 49 per cent to £218m, up from £146m the previous year.
Steve Lowe, group external affairs director, said that approximately £900m of annuity business was “pulled forward” to 2012 which would normally have been conducted in 2013. This was due to a wave of men buying annuities before the EU’s gender-neutral pricing laws came into effect, and to advisers rushing to write business before commission was banned by the RDR.
Rodney Cook, group chief executive for Just Retirement, said: “As we have previously communicated, the normal patterns of sales in the annuity market during 2012 were significantly disrupted due to the introduction of gender neutral pricing and the retail distribution review.
“This has given both the market and Just Retirement very challenging comparative figures against which to measure H1 2013/14 performance, but these results are in line with our expectations.”
