News Column

Partnership Assurance Shares Up As It Moves To Cut Costs

June 23, 2014

Steve McGrath

LONDON (Alliance News) - Partnership Assurance Group PLC Monday announced a round of cost cutting, just weeks after it said disruption to the UK pensions market had forced it to implement a hiring freeze, removal of contractors where possible, and strict cost controls.

In a statement, the specialist annuities provider said its new measures, which are expected to generate annualised cost savings of GBP21 million in 2015, include cutting about 100 roles across its London and Redhill offices.

"Whilst this is regrettable, we believe this action is necessary to manage our cost base to reflect the impact of the pension changes announced in the Budget on sales of individual annuities across the industry," Chief Executive Steve Groves said.

Last month, the company had said average daily individual annuity quote levels had fallen by about half in the wake of the 2014 Budget proposals made by Chancellor of the Exchequer George Osborne, who removed the effective requirement on individuals to buy annuities in retirement.

Partnership Assurance expects its total operating expenses in 2015 to be approximately GBP80 million after the cost cutting. It expects to book costs of GBP3 million this year for the changes, and a further GBP5 million during 2014 and 2015 to support initiatives like product development.

"It is our intention that the decisive action we have announced today will deliver the necessary alignment of our cost base required for the business to thrive in our new environment," Groves said.

Partnership Assurance shares were up 2.4% at 127 pence Monday morning.

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Source: Alliance News

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