Specialist life insurer Just Retirement reported a 3.8 percent drop in its first quarter sales, and said its capital reserves were strong enough to withstand a sharp increase in financial market turbulence.
Just Retirement, which offers policies geared towards those in or approaching retirement, said it had group sales of 183.5 million pounds in the three months to Sept 30, down from 190.8 million pounds in the same period last year.
The decline was driven by a sharp drop in sales of equity release mortgage policies, which fell 15.8 percent to 33.1 million pounds. Equity release policies allow retired homeowners to cash in part of their housing equity.
Sales of Just Retirement's other main product -- enhanced annuities, which offer higher payouts to smokers and other people who are statistically likely to die before they reach full life expectancy -- also fell, dropping 0.7 percent on the year to 150.4 million pounds.
Just Retirement reassured on its capital strength, saying it had a solvency ratio of 170 percent at the end of September, allowing it to withstand a bond default rate 8 times higher than normal market expectations.
Shares in life insurers fell steeply last week on concerns that a rise in corporate bankruptcies as the developed world enters recession could trigger a wave of bond defaults, denting their capital reserves.
"We reiterate that, with rapidly increasing assets under management, we remain confident of meeting management's expectations," Just Retirement Chief Executive Mike Fuller said in a statement.
(Reporting by Myles Neligan; Editing by Hans Peters )
LONDON (Reuters)