Pension Insurance Corporation (PIC) completed £3.5bn of bulk annuity deals in H1 2020, down from the £6bn worth of transactions in H1 2019, its half-year results have revealed.

The firm's reinsurance transactions in the first half of 2020 covered £3.9bn of liabilities, compared to £7.1bn of liabilities in the same period of 2019.

PIC's IFRS profit before tax for the first six months of 2020 increased by 244 per cent compared to the same period last year, rising from £89m to £306m.

The company’s H1 results showed that this was largely due to the positive impact of investment-related variances, which contributed £119m in the first half of 2020 after having resulted in a £540m loss in the comparable period in 2019.

However, its adjusted operating profit before tax declined from £629m to £187m due to a 34 per cent reduction in net release from operations to £229m as PIC encountered a drop in new business and reinsurance.

Net premium revenue, derived from premiums written and outward reinsurance premiums, fell by 41 per cent to £3,015m, with total revenue having declined by 51 per cent to £4,029m.

Another factor was the drop in the impact of changes in valuation assumptions from £335m to £24m.

The company’s solvency ratio dropped marginally from 164 per cent to 153 per cent, having announced a capital raise of £750m of new equity from existing shareholders in January and raised £300m of debt in May.

The value of PIC’s financial investments climbed from £40.9bn to £47.7bn, with the company noting that its portfolio had been “resilient” during the period as just 0.2 per cent of it had moved from investment grade to non-investment grade.

Policyholder satisfaction climbed slightly, rising from 99.1 per cent to 99.5 per cent, with 83.9 per cent of policyholders giving the company a perfect score.

PIC noted that its normal service levels had not been disrupted by the pandemic, with a slight improvement in response times achieved as the company said its employees adapted “seamlessly” to working from home.

No employees have been furloughed by PIC and 56 new hires have been made in the first six months of the year.

PIC chief executive, Tracy Blackwell, said: “Despite a volatile and uncertain backdrop, PIC has continued to win new business, manage our risks, strengthen our stakeholder relationships and garner considerable support from both our shareholders and the debt markets during the first half.

“Our focus on PIC’s purpose, to pay the pensions of our current and future policyholders, has helped us thrive in very difficult circumstances.

“Our policyholders have remained our absolute priority during this period and we have maintained a first-class service for them, alongside a very strong overall performance. I want to thank our employees for their efforts over the past few months and look forward to a successful second half of the year.”

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