REFILE-Friends Life posts 7 pct H1 drop in operating profit

Wed Aug 6, 2014 2:34am EDT

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LONDON Aug 6 (Reuters) - British insurer and pensions provider Friends Life Group posted a 7 percent fall in first-half operating profit, weighed by a decline in the value of its new business.

The life and pensions group, created in 2008 by entrepreneur Clive Cowdery, said the fall in value had been expected, the result of changes to the UK pensions and savings industry announced at the most recent budget.

Operating profit fell to 159 million pounds ($268.09 million) in the six months ended June 30, from 171 million pounds a year earlier.

The value of new business - the value of expected profits from new business net of the cost of the capital needed to underwrite that business - fell 24 percent to 65 million pounds as a result of changes to the annuities market.

The group said it would pay an interim dividend of 7.05 pence per share, unchanged on the year. ($1 = 0.5931 British Pounds) (Reporting by Simon Jessop; editing by Richa Naidu)