StockMarketWire.com - Pensions provider Just Group reported a sharp fall in first-quarter new business sales as a 'temporary reduction' in defined benefit activity saw retirement income sales slump.

For the three months to 31 March, new business sales fell 55% to £276m from a year earlier, as retirement income sales tumbled 59% for the year.

The bulk of decline was led by a 90% slumped in defined benefit (DB) de-risking sales, which the company said was due to a 'temporary reduction in activity levels in our target segment.'

In second quarter, however, the company had completed a series of transactions with a value in excess of £300m and the run rate was returning to that of the second half of 2018.

Guaranteed Income for Life sales for the quarter were down 23% year on year to £145m and Lifetime Mortgage advances of £79m were down 47%.

'Today's update reflects our disciplined approach to the management of our capital in the new regulatory regime. Our GIfL price increases and DB pricing standards have been implemented rigorously, ensuring that we deliver to shareholders a new business internal rate of return in line with our targeted mid-teen levels. The continued growth in our markets gives us confidence that there remains a considerable opportunity to deploy capital in a disciplined and profitable manner. Although it was a quiet start to the year, DB transaction volumes in Q2 have been good. Given the strength of our pipeline, we remain comfortable that DB sales for the year will be similar to the annualised rate seen in H218,' said David Richardson, Interim Group Chief Executive.

'Our capital position has been much improved by the £375m raised in March, and we are absolutely focussed on achieving capital neutrality by 2022. We have a plan in place to ensure we achieve this target, which includes a number of actions we will be taking over the course of this year. These include a renewed focus on cost control, the closure of loss making operations such as the US, reductions in new business LTM backing ratios and a shift towards more capital efficient assets.'




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