Just Retirement takes £36m step into DB de-risking

Retirement specialist Just Retirement has completed a £36.5m deal for a shipping industry pension scheme, the biggest underwritten defined benefit de-risking transaction completed to date in the company’s fledgling de-risking business.

The group also expects to complete several smaller transactions, which will bring its total premium income from defined benefits de-risking to £80m for the year to 30 June 2014.

The firm claims these transactions demonstrate strong potential in the underwritten DB de-risking market.

However, Just Retirement chief executive officer Rodney Cook warned that previous estimates that the company’s overall full-year sales figures would grow by 7 per cent are “no longer appropriate” following the pensions shake-up announced by chancellor George Osborne.

The firm announced it had launched into the pensions de-risking business in its April 2013 interim results, in which it also reported “record” group sales of £946.6m in the second half of 2012.

Just Retirement’s share price was one of the worst hit following Mr Osborne’s announcements, which wiped £3.2bn off listed providers’ value in just one hour.

He said: “Although it is very early days, our current trading suggests that the Budget has had a material effect on individually underwritten annuity volumes.

“As financial advisers and customers come to terms with the new environment we are optimistic that large numbers of them will continue to secure a guaranteed lifetime income in retirement, particularly if the new guidance concept is effectively implemented.

“As today’s announcement demonstrates, we are enjoying some success in the defined benefit market, partially offsetting IUA market weakness.”

Mr Cook added that Just Retirement will aim to further increase the amount of de-risking business it completes.

This morning, it emerged that specialist annuities provider Partnership has issued a letter to shareholders warning of a short-term hit to annuities sales as a result of Mr Osborne’s pensions announcements.

Following the Budget, FTAdviser reported that Prudential and Legal & General were both planning to increase their emphasis on bulk annuities this year.