Just Retirement annuity woes

Just Retirement annuity woes

DB de-risking is now a bigger part of Just Retirement’s business than annuities, according to the company’s results for the year ending 30 July.

The Surrey-based company’s operating profits fell by 11 per cent to £86.4m despite a five-fold growth in its DB de-risking business.

Sales of Just Retirement’s guaranteed income for life and care plan products fell by 56 per cent year-on-year.

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But fourth quarter sales were up modestly compared to the third quarter, which the company hoped could be the start of a turning point.

Fourth quarter total retirement sales were up 10 per cent compared to Q4 2013/14 and up 28 per cent compared to Q3 2014/15.

Rodney Cook, chief executive of Just Retirement, said: “Our response to the pension reforms has largely enabled us to replace lost individual guaranteed income for life business with DB de-risking premiums.

“Individual retirement income enquiries are now growing in number, and the increase in quote activity is beginning to turn into sales.

“We expect GIFL sales in the quarter ending 30 September to be approximately 25 per cent up on the prior quarter and higher than the same period last year.”

In August the company announced it would be merging with Partnership Assurance.

Analyst View

Barrie Cornes, an analyst with Panmure Gordon, said: “The year-end results for the 12 months ending 30 June were largely as expected.

“We view the impending merger with Partnership Assurance as a positive, particularly given the cost-reduction potential that has already identified £40m of annualised cost savings, although we suspect a higher figure might be achievable.”