Closed book insurer Phoenix Life has seen pre-tax profits fall by 45 per cent in the first six months of the year following the sale of Ignis Asset Management.
Pre-tax profit fell from £256m to £141m, while group operating profits fell by 49 per cent from £266m in the first half of 2014 to £135m this year.
Last year Ignis Asset Management contributed £17m to operating profits, but was sold to Standard Life Investments for £390m in April 2014.
A Phoenix spokeswoman says profits were hit by the sale and added the firm’s profits tend to be “lumpy”.
Cash generation also fell by 67 per cent from £332m to £110m. But Phoenix says it “remains on track” to achieve its target of over £200m in cash generation over the whole year.
In line with other insurers, annuity sales have fallen since the pension reforms were announced in the 2014 Budget.
However, Phoenix only writes contracts for its own customers – many of whom have policies with valuable guaranteed annuity rates – so sales have fallen less than at other firms.
It wrote annuities totalling £208m in the first half of the year, down from £284m in the same period last year.
Volumes of policies without guaranteed rates have dropped by 47 per cent over the period.
Group chief executive Clive Bannister says he does not expect Phoenix to be caught by the FCA’s investigation into cross subsidies applied by annuity providers.
The Treasury is also consulting on taking action on early exit charges on pensions policies.
But Bannister says the average exit charge on the firm’s unit-linked policies is around 1 per cent.
Separately, Phoenix has announced that WH Smith chair Henry Staunton has replaced former FSA chairman Sir Howard Davies as group chairman.