(Bloomberg) — Friends Life Group Ltd., founded by insurance dealmaker Clive Cowdery, may start competing for corporate bulk annuities to recapture lost revenue following the government-imposed changes to the pension system.

The insurer reported a 24 percent drop in the value of new business, a measure of future sales, to 94 million pounds ($149 million) in the first nine months of the year from a year earlier, the company said in a statement today. Chief Financial Officer Tim Tookey said the company is evaluating bulk annuities as a potential new line of business.

“The bulks space is attractive, it’s growing and the margins are attractive,” Tookey said in a telephone interview. “I am also of the house that believes whilst there are more participants going into that market, increased level of demand means the margins” are likely not to remain as attractive.

Competitors including Aviva Plc and Legal & General Group Plc have boosted bulk annuity deals, where the insurer assumes liabilities from companies’ balance sheets, since U.K. Chancellor of the Exchequer George Osborne scrapped rules in March that pushed retirees to buy an individual annuity.

Friends Life today reported a 23 percent slump in the value of new business for its U.K. division, which sells the retirement product to individual customers. The insurer had said in May that it would miss its earnings target this year after it forecast a 70 percent drop in annuity sales.

Tookey said the company already has the skills to compete in the external bulk annuity market after completing two internal transactions, including the relocation of 760 million pounds of annuities from its with-profit funds to non-profit funds business. The insurer said it plans to complete a third 650 million-pound transaction by early 2015.

Bulk annuities are “an option and it’s one where we feel we have very strong credentials,” Tookey said.

The shares, down 7.8 percent this year, haven’t recouped all of their losses since Osborne’s pension revamp. They climbed 1.2 percent to 326.3 pence at 2:29 p.m. in London.

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