Net investment income may have boosted life assurer Partnership Assurance's (PA.) reported half-year profit, but that masks a rather different underlying performance. Operating profit actually dropped 44 per cent year on year to £33m as the Budget day decision to scrap the compulsory purchase of annuities hit the group's sales hard.
Indeed, Partnership's new business premiums for retirement annuities slumped 43 per cent as a result of that reform and quotes for individual annuities are now 50 per cent below last year's levels. There could be more pain ahead, too. Chief executive Steve Groves told us that, ahead of the implementation of the changes in April, customers have been "doing absolutely nothing" - rather than buy alternative products. That's because they're awaiting clarification of the new regulations accompanying the changes and, in the meantime, annuity sales could well face more pressure.
