Just Retirement Beat Estimates on Corporate Pensions

Just Retirement Group Plc reported better-than-expected sales in the third quarter after its new corporate pensions business helped offset a 59 percent slump in individual annuities.

The insurer increased sales of defined benefit pensions, or bulk annuities, to 24.8 million pounds ($39 million) in the three months to Sept. 30 from 3.2 million pounds a year earlier, the company said in a statement today. Revenue from annuities to retirees slumped to 129.3 million pounds.

“Just Retirement has delivered a better than anticipated sales performance,” said Barrie Cornes, an analyst at Panmure Gordon & Co. with a buy rating on the stock. “Sales of DB ‘bulk’ schemes were much stronger than we had anticipated.”

The shares rallied 2.6 percent to 128.8 pence at 9:33 a.m. in London. Even so, the company is still down 39 percent this year since the Chancellor Exchequer George Osborne scrapped rules in his 2014 budget that pushed retirees to buy an annuity.

Insurers from Just Retirement to Aviva Plc have responded to the rule change by ramping up their corporate pension business, where they assume liabilities from companies’ balance sheets, to recapture the lost revenue. Today’s results exclude a 75 million-pound plan announced in October and a 76 million-pound deal to be completed this week, Just Retirement said.

Total sales from new business for the quarter declined 42 percent to 255.1 million pounds, the company said.

Before it's here, it's on the Bloomberg Terminal.