(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.