TIDMPA.
RNS Number : 6141E
Partnership Assurance Group PLC
05 November 2015
5 November 2015
Q3 Trading Update
Partnership Assurance Group plc ('Partnership') today announces
its sales for the three months ended 30 September 2015
Q3 financial highlights
Total Q3 sales of GBP109 million, an increase of 22% compared to
Q3 2014, comprising:
-- Individually underwritten annuity ('IUA') sales of GBP68
million, broadly flat year on year and a 26% increase on Q1 sales,
the last quarter before the Pensions Freedoms were implemented
-- Medically underwritten Defined Benefit ('DB') sales of GBP24 million
-- GBP16 million of care annuities and GBP1 million of protection
Current trading and outlook
-- Quote volumes for IUAs in September and October were
approximately a third higher than April 2015, when the Pension
Freedoms were implemented. As a result, although conversion rates
are yet to stabilise, we expect sales of IUAs to grow approximately
10% in H2 2015 versus H1 2015 and H2 2014
-- Partnership generated GBP92 million of DB sales in the nine
months ending 30 September and is in exclusive negotiations in
respect of over GBP60 million further DB transactions. The
remaining strong and growing pipeline comprises high quality
opportunities across the major Employee Benefit Consultants. Q4 is
traditionally a busy quarter for completions and there is the
potential for this to be more pronounced this year ahead of
Solvency II implementation in January 2016. This gives us
confidence in our previously announced target of at least GBP200m
of medically underwritten bulk annuity sales for the full year
-- Pricing discipline continues to be maintained and gross
margins in H2 to date remain consistent with H1 2015
Operational highlights
-- Following clearance from the Competition & Markets
Authority on 28 October, Partnership's previously announced all
share merger with Just Retirement plc ('Just Retirement') to form
JRP Group plc is expected to complete around late December 2015,
subject to shareholder and regulatory approvals
-- Enhanced Retirement Account(1) ('ERA') launched in October
and has been well received by IFAs and customers. The ERA is a
simple low cost convenient tax efficient proposition which allows
customers to receive a guaranteed income and retain the flexibility
of drawdown within one SIPP wrapper on an award-winning third party
platform
-- We estimate that over 15% of bulk annuity deals under GBP100
million in the first 6 months of 2015 were medically underwritten
compared with 10% over the whole of 2014, demonstrating the
continuing penetration of medical underwriting for bulk
annuities
-- Capital position strengthened through 9.99% placing, which
raised gross proceeds of GBP54 million to cover expected
integration and transaction costs, provide further comfort over the
transition to Solvency II and provide additional financial
flexibility to pursue future growth initiatives and product
development
-- Our Solvency II programme is progressing well and we await
formal feedback from the PRA in due course
Commenting on Q3 sales and current trading, Steve Groves, Chief
Executive Officer, said:
"Partnership continued to deliver tangible progress during this
quarter. Consumer and adviser research continues to show the
importance of a guaranteed income for life, as reflected by quotes
for individually underwritten annuities increasing by approximately
a third compared to April, when the Pensions Freedoms were
implemented.
Our commitment to developing innovative new products and
enhancing our existing individually underwritten annuity
proposition to meet customer needs post April 2015 was demonstrated
by the launch of our new Enhanced Retirement Account. This
proposition provides the certainty of a guaranteed income for life
as well as the flexibility to manage investments within one simple
low cost tax efficient proposition on an award-winning platform.
And in Defined Benefit, our pipeline is strong and growing, giving
us confidence in our previously announced target of at least GBP200
million of Defined Benefit sales for the full year.
The Partnership business is well positioned in its chosen
markets, and as part of the enlarged JRP Group, will be able to
accelerate the existing strategy of leveraging our unique
Intellectual Property to write profitable new business in the UK
Retail, Defined Benefit and US Care markets."
New business sales by quarter(2)(3) (GBPm)
3 months
to: 30-Sep-15 30-Jun-15 31-Mar-15 31-Dec-14 30-Sep-14 30-Jun-14
Individual
annuities 68 74 54 62 69 135
DB bulk annuities 24 44 24 210 - 3
Care 16 13 20 19 20 16
Protection 1 1 1 1 1 1
------------------- ---------- ---------- ---------- ---------- ---------- ----------
Total new
business 109 132 99 291 89 155
Notes:
(1) Retirement account will allow customers to benefit from an
individually underwritten guaranteed income for life and maintain
flexibility on residual funds within the same product
(2) New business sales are Single Premium Equivalent sales
completed in the period
(3) Subject to rounding
Enquiries:
Investors: Media:
----------------------------------- --------------------------------------------------
Katherine Jones Jim Boyd Citigate Dewe
Director of Director of Corporate Rogerson
Investor Relations Affairs Grant Ringshaw
+44 (0) 207 +44 (0) 207 618 +44 (0) 207 638
444 8040 2744 9571
katherine.jones@partnership.co.uk pressoffice@partnership.co.uk
----------------------------------- ------------------------------- -----------------
Further information
A copy of this announcement is available on Partnership's
website www.partnership-group.com
The financial information contained in this announcement has not
been audited or reviewed by the Group's auditors.
Forward looking statements
This announcement in relation to Partnership Assurance Group plc
and its subsidiaries (the 'Group') contains, and we may make other
statements (verbal or otherwise) containing, forward-looking
statements about the Group's current plans, goals and expectations
relating to future financial conditions, performance, results,
strategy and/or objectives.
Statements containing the words: 'believes', 'intends',
'expects', 'plans', 'seeks', 'targets', 'continues' and
'anticipates' or other words of similar meaning are forward-looking
(although their absence does not mean that a statement is not
forward-looking). Forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances
that are beyond the Group's control. For example, certain insurance
risk disclosures are dependent on the Group's choices about
assumptions and models, which by their nature are estimates. As
such, actual future gains and losses could differ materially from
those that we have estimated.
Other factors which could cause actual results to differ
materially from those estimated by forward-looking statements
include but are not limited to: domestic and global economic and
business conditions; asset prices; market related risks such as
fluctuations in interest rates and exchange rates, and the
performance of financial markets generally; the policies and
actions of governmental and/or regulatory authorities, including,
for example, new government initiatives related to the provision of
retirement benefits or the costs of social care and the effect of
the European Union's "Solvency II" requirements on the Group's
capital maintenance requirements; the impact of inflation and
deflation; market competition; changes in assumptions in pricing
and reserving for insurance business (particularly with regard to
mortality and morbidity trends, gender pricing and lapse rates);
risks associated with arrangements with third parties, including
joint ventures and distribution partners; inability of reinsurers
to meet obligations or unavailability of reinsurance coverage; the
impact of changes in capital, solvency or accounting standards, and
tax and other legislation and regulations in the jurisdictions in
which the Group operates.
As a result, the Group's actual future financial condition,
performance and results may differ materially from the plans, goals
and expectations set out in the forward-looking statements within
this announcement. The Group undertakes no obligation to update any
of the forward-looking statements contained within this
announcement or any other forward-looking statements it may make.
Nothing in this announcement should be construed as a profit
forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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