The impact of the pension reforms on sales of annuities has lead to operating profits at specialist insurer Partnership falling 38 per cent.
Full year results published today show operating profits fall from £64m in 2014, to £40m in 2015.
Partnership is expected to complete its merger with Just Retirement – which saw operating profits rise 43 per cent in the second half of 2015 – in April 2016.
In addition, the cost of complying with the Solvency II regime led to a pre-tax loss, on an IFRS basis, of £16m compared to a profit of £24m in 2014.
While bulk annuities sales rose to £277m – up from £247m – individual annuities plummeted from £466m in 2014 to £280m last year.
Overall total new business dropped 20 per cent year-on-year, from £791m to £631m. Likewise operating margin on new business was 1.7 per cent in 2015, down from 4.9 per cent.
The firm incurred cost of £13.5m including meeting Solvency II requirements, developing a drawdown/annuity blend and launching a US care business.
Partnership chief financial officer David Richardson says: “We have a conservative, well matched asset portfolio and a resilient capital position. I look forward to bringing together the strengths of Partnership and Just Retirement as we merge to become JRP Group.”
Chairman Chris Gibson-Smith says: “The merger strengthens our position as a consumer champion and as a challenger to the traditional insurers in the defined benefit and retirement income markets.
“As JRP Group, we have a clear strategy to use our unrivalled intellectual property, underwriting expertise and asset/liability matching capability to deliver better customer outcomes, across our increasingly diversified suite of products in the UK, US and South Africa.”