Legal & General saw its annuity sales tumble by almost half, from £2bn to £1.1bn, in the six months to the end of June as profits after tax fell.
Earlier this year L&G said it was exploring new annuity-style products to bring to the UK market, especially in the defined contribution space.
Meanwhile, sales of lifetime mortgages rose by 23 per cent to £500m.
The company also saw demand for pension de-risking strategies reach "new heights", with L&G currently quoting on more than £20bn of pension risk transfer deals
L&G has seen falling life expectancy boost its bottom line, as it expects to see a boost of between £300m and £400m because of its annuity customers dying sooner than predicted.
Earlier this week figures from the Office for National Statistics revealed the UK had experienced a dramatic slowdown in improvements in life expectancy at birth and at age 65 for both men and women.
Nigel Wilson, chief executive of L&G, said: "We are reviewing our long term mortality assumptions and expect to make a full year release in [the second half of the year] which will be larger than the £332m released for full year 2017."
The assets under management for the investment business were £984bn, a rise of 4 per cent, but net inflows to the UK operation from sources other than other parts of Legal and General’s business were much lower than last year, at £14.6bn, compared with £21.7bn in 2017.
Flows into the US business were marginally higher and the insurance business wrote 3 per cent more premiums, with a total of £1.4bn.
FTAdviser's sister paper, the Financial Times, has reported that L&G's investment management division is embroiled in a compliant from a whistleblower, following complaints from several employees about alleged compliance and risk failures.
L&G said negative market movements had dented its profit after tax, which fell by 19 per cent to £772m. The dividend rose by 7 per cent to 4.6p.
Mr Wilson said: "Legal & General again delivered consistent, positive results with five of our six businesses increasing their operating profits for the first half of 2018.
"Operating profit from divisions increased 7 per cent to £1.1bn and RoE was 20.3 per cent. However, a reduction in positive investment variance meant earnings per share were down from 14.19p to 13p.
"We are confident that Legal & General is strongly positioned for growth in H2 and beyond."