(Adds details, background, CEO quote; updates shares)
April 9 Insurer Just Retirement Group Plc
said it no longer expects full-year sales to grow 7
percent, blaming uncertainty in Britain's individually
underwritten annuities market after surprise pension reforms
In the biggest shake up in pensions in nearly a century,
Finance Minister George Osborne's annual budget in mid March
relaxed rules that traditionally forced pensioners to buy
annuities at retirement.
The reforms give retirees more access to their pension pots
and allow them to put away more money tax-free, giving them the
option of not buying annuities.
This could mean less business for Just Retirement, which
gets about three-quarters of its sales from individual
underwritten annuities (IUA), which are underwritten against a
retiree's pensions pot.
Such annuities are given to people who often have health
problems so they can get better terms.
"Current trading suggests that the budget has had a material
effect on individually underwritten annuity volumes," Chief
Executive Rodney Cook said in a statement on Wednesday.
The company, which went public last November, did not give a
new estimate for sales growth.
Bernstein Research said last month that the reforms could
shrink Britain's annuity market for individuals by up to half.
Just Retirement said the weakness in the IUA business would
be moderated by a "small success" in the defined benefit market
- where the employer and employee agree on the terms of the
The pension provider now expects total premium income from
its defined benefits de-risking business to be at least 80
million pounds ($134 million) in the full year ended June 30.
The company's total annuities sales fell 14 percent to 687.8
million pounds for the half year ended Dec. 31.
Just Retirement, which is backed by private equity group
Permira, said it would provide a further update on May
12, along with its third-quarter results.
Shares of the insurer were down 0.07 percent at 147.5 pence
at 1105 GMT on the London Stock Exchange.
They have lost 45 percent of their value since the budget
announcement, while rival Partnership Assurance's stock
has lost 59 percent of its value. The shares of annuities
providers such as Legal & General Group Plc and
Resolution Ltd have also dropped sharply since the
(Reporting by Richa Naidu and Esha Vaish in Bangalore; Editing
by Joyjeet Das and Savio D'Souza)