PensionsNov 5 2015

Individual annuity sales stable at pre-merger JRP Group

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Individual annuity sales stable at pre-merger JRP Group

Partnership has reported total sales of £109m for the third quarter, up 22 per cent on the same period last year, while also confirming the resignation of chief executive Steve Groves as the merger with Just Retirement completes in late December.

Individually underwritten annuity sales of £68m were broadly flat year-on-year and a 26 per cent increase on first quarter sales; the last quarter before the pensions freedoms were implemented.

Quote volumes for individual annuities in September and October were about a third higher than in April.

As a result, although conversion rates are yet to stabilise, sales of are expected to grow approximately 10 per cent in the second half of this year, versus the second half of 2014.

The firm generated £92m of defined benefit sales in the nine months ending 30 September and is in exclusive negotiations in respect of more than £60m further DB transactions.

Partnership estimated that over 15 per cent of bulk annuity deals less than £100m in the first six months of 2015 were medically underwritten, compared with 10 per cent over the whole of 2014.

The latest statement noted that the Enhanced Retirement Account, launched in October, has been well received by IFAs and customers.

Mr Groves commented that consumer and adviser research continues to show the importance of a guaranteed income for life, as reflected by quotes for individually underwritten annuities increasing by approximately a third compared to April.

“Our commitment to developing innovative new products and enhancing our existing individually underwritten annuity proposition to meet customer needs post April 2015 was demonstrated by the launch of our new Enhanced Retirement Account.”

He added that in defined benefit, the firm’s pipeline is growing, giving confidence in a previously announced target of at least £200m of such sales for the full year.

Meanwhile, the other half of the JRP Group, Just Retirement announced total new business sales of £359.9m for the quarter, 41 per cent higher than the first quarter.

Individual annuity sales were 7 per cent higher than the comparative period in 2014 and up 26 per cent compared to the fourth quarter last year.

Total DB de-risking sales were £103.6m, more than four times those in the first quarter, with three further notable DB sales totalling £269m completed in October meaning the group expects to write approximately £500m of DB sales in the first half of 2015/16.

Lifetime mortgage advances of £114.4m represented an increase of 42 per cent on the first quarter.

Rodney Cook, group chief executive of Just Retirement, commented that the individual annuity segment is showing continuing signs of recovery, with the 7 per cent increase in sales showing that the market is returning to this product.

“These results mean we enter the proposed merger with Partnership with momentum, and I very much look forward to what we can achieve over the remainder of 2015/16 and beyond.”