Partnership has predicted a gradual return to growth for individual annuities during the second half of this year, after it revealed sales have fallen further in the first three months of this year to £54m from £62m over the closing quarter of 2014.
Its interim results, published today (13 May), said this reflected an expected increase in deferrals in the run-up to the pension freedoms. The firm also warned second quarter sales would be driven to a large extent by first quarter quote levels “and are therefore likely to remain subdued”,
However, the outlook noted early signs of a step up in adviser and customer activity following the at-retirement reforms, with “key lead indicators for individual annuities to date point towards a gradual return to growth in H2 2015”.
In addition, the company said it will launch its retirement account through a third party wrap platform in the second half of the year.
While other annuity providers have backed individual annuity falls with growth in bulk deals, Partnership’s medically underwritten defined benefit ‘bulk annuity’ sales were just £24m during the first three months of the year, compared to £210m in the last three months of 2014.
The statement blamed this on “lumpy” completions, although a strong “high quality pipeline” supports confidence in the previously announced target of at least £200m of sales this year.
Yesterday, Just Retirement’s results revealed DB premiums of £448m over the nine months to the end of March, compared to £42m in the previous nine months. However, Just Retirement also described the business as “lumpy”.
Elsewhere, Partnership conducted £20m of care annuities and £1m worth of protection sales.
Advanced discussions with potential partners regarding launch of immediate needs care annuity in US are progressing well, according to the release.
Steve Groves, chief executive at the firm, commented that widespread market commentary and adviser feedback has been helpful in promoting a strong case for annuities and their role in retirement income planning.
“I expect further clarity on customer behaviour and outlook to emerge over the coming months and look forward to providing an update at our interim results in August.
“Looking ahead, we remain focussed on leveraging our unique intellectual property to carefully select risks and write profitable new business in the UK retail, defined benefit and US care markets.”
peter.walker@ft.com
