Just Retirement is to aiming to sell pension annuities directly to health-impaired consumers via the internet, as it moves to win back investor confidence after a disappointing stock market launch.
The company, which sells annuities to smokers and people with illnesses mainly through financial advisers, has told investors that it will make a further push into alternative sales channels, including price comparison websites.
Shares in Just Retirement dropped 5 per cent on its first day of trading in November – making it one of only a small number of companies to suffer a fall in its price on its market debut.
After being priced at 225p, the shares hit a low of 186½p as concerns grew over slowing sales growth at the company and Partnership, its rival, which also listed last year.
Investors have been worried that changes to the way financial advisers are paid will give them less incentive to recommend “non-standard” annuities, which provide more generous retirement incomes to pensioners expected to die early.
However, shares in Just Retirement – in which private equity house Permira retains a 62 per cent stake – surged past their flotation price for the first time this week.
They rallied 16.5p to 244.5p on Friday, taking their gains over five days to 14 per cent, and valuing the equity at £1.2bn. Investors include Schroders, which has a 6.2 per cent holding.
Just Retirement has in the past been regarded as a potential takeover target for a mainstream insurance company. Rivals such as Legal & General and Friends Life have expressed a growing interest in the specialist annuity market.
But analysts suggested that the recent rally had instead been driven by a well-received roadshow from Just Retirement’s management, led by Rodney Cook, chief executive.
Mr Cook said that a slowdown in sales through independent financial advisers was temporary, and that intermediaries would remain an important source of sales.
Nevertheless, Just Retirement outlined plans to increase its presence on price comparison sites, which currently account for less than 1 per cent of its premium income.
It also wants to sell more products through specialist advisers and distributors, including Hargreaves Lansdown, Age Concern and Saga, as well as employee benefit consultants, banks and building societies.
Later this year, Just Retirement is planning to roll out a new system to price annuities, which it says will give it a more sophisticated understanding of how medical conditions affect life expectancy.
It hopes to complete about half a dozen medically-underwritten bulk annuity deals with pension fund trustees in the first half of the year.
Equity analysts at several leading banks and brokers are preparing to issue upbeat reports on the company in the coming weeks.
In spite of the recovery in Just Retirement’s shares, those in Partnership are still trading below their listing price of 385p, at 341p.