Just retirement share price rises as it swings to profit ahead of merger with Partnership Assurance

Jessica Morris
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It also saw a stabilisation of the annuities market (Source: Getty)

Shares in Just Retirement rose 2.99 per cent to 138p per share in early morning trade after the insurer swung to profit in the second half of 2015.

The figures:

Just Retirement posted a pre-tax profit of £26.1m in the six months ended 31 December, up from a loss of £9.2m during the first half of 2014.

It came as total retirement sales rose more than 50 per cent to £996.2m during this period.

This was helped by sales of defined benefit de-risking products which rose 98 per cent to £701.2m.

It also saw a stabilisation of the annuities market, with sales inching up two per cent to £271.2m.

Why it's interesting:

Just Retirement said its £670m acquisition of rival Partnership Assurance would complete next month.

The tie-up between the two insurers giants will help them take on the UK's buoyant defined benefit market, which the pair previously said was one of the largest in the world.

Pension changes, announced in chancellor George Osborne's 2014 budget, mean people who are retiring no longer need to buy an interest-bearing annuity with their pension savings.

Just Retirement's subsequently suffered a sharp drop off in the sale of annuities, however today's results show that this has stabilised somewhat.

As part of its bid to diversify, it has launched “guaranteed income for life” products, and sales of these nearly doubled in the second half of last year.

What Just Retirement said:

"We are pleased with our progress to date in the evolving pensions landscape and changing regulatory environment. For the future, the DB market offers significant potential and today's figures show that we have real traction in this area. Meanwhile, the individual GIfL market has stabilised and we expect to see a return to longer-term growth here too," Rodney Cook, Just Retirement's Chief Executive, said.

"The merger with Partnership provides us with a further source of earnings growth, and it will enable us to drive significant cost efficiencies, underpinning our value-for-money products. The integration planning we are doing confirms our confidence in achieving at least £40m of cost savings."

In short:

Just Retirement's bid to diversify in the face of difficult regulatory changes paid off as the company swung to profit in the second half of 2015.

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