Partnership is the longest established UK insurer specialising in the design and manufacture of financial products for people whose health and lifestyle means their life expectancy is likely to be reduced.
Partnership's primary focus is on the niche but rapidly growing market of enhanced annuities, where retiring people with a reduced life expectancy receive higher annuity payments.
Partnership can provide a better retirement income for people with a wide variety of health conditions, from the relatively minor such as high blood pressure, to the more serious, such as heart failure, stroke, diabetes, kidney failure and cancer, as well as lifestyle factors such as smoking or obesity.
Critical to its success is the data it has accumulated on its policyholders, amassed over 16 years. This is a unique and powerful asset, enabling Partnership to make more accurate estimates about life expectancy. Partnership was the first company to offer enhanced annuities in the UK and is now one of the fastest growing insurers as evidenced by being number 1 in both the 2011 Sunday Times HSBC Top Track 250 annual league table and the 2012 and Sunday Times Deloitte Buyout Track 100.
Having entered the market with enhanced annuities, Partnership has since added to its product range with long-term care annuities, equity release lifetime mortgages and life assurance. All products are designed for people in ill health, providing a higher benefit as a result. The life assurance provides cover for people who have been declined elsewhere.
Our most recent addition is in the area of defined benefit (DB) pension de-risking, particularly for smaller company pension schemes.
Over the past few years DB schemes have been an increasingly important issue for companies. Volatile market conditions and the inherent uncertainty around levels of future liabilities mean that these schemes are a very risky business for trustees, sponsoring employers and beneficiaries. Added to this is the fact that people are now living for far longer than many schemes ever anticipated.
Since 1981, the average life expectancy of males aged 65 has increased from 14 to 21 years - a 50% increase, which is anticipated to increase to 26 years by 2051. Statistics such as these only highlight the risk of ensuring that available assets will be sufficient to cover a scheme's future liability.
Many firms in the pensions industry are increasingly becoming very focused on 'de-risking' DB schemes. Partnership has been working with a number of companies in the de-risking process through bulk buyouts and buy-ins.
Using enhanced annuities can reduce the cost of a de-risking exercise by taking into account the health and lifestyle of scheme members. This approach uses lifestyle and health information specific to each member to get the most competitive terms from annuity providers. It allows access to buy-in for schemes that may not be able to obtain attractive terms from standard providers.
This type of policy guarantees existing pension benefits, but it can be bought at a potentially significantly lower cost because a more accurate forecast of longevity risk is made across a scheme's membership. Partnership estimates that roughly 40%-50% of retiring people could qualify for an enhanced annuity.
Partnership is a well capitalised, privately-owned company, with a strong management team committed to providing innovative financial solutions to meet the needs of people in retirement. The company is regulated by the Financial Services Authority (FSA) and has assets under management of over £2bn. As for all regulated life assurers, the company is required to provide for liabilities on a prudent basis, and then hold additional capital in excess of this level. At the end of 2010, Partnership held capital in excess of 160% of the FSA requirement. The company is rated "B" (Strong) by AKG Actuaries Consultants.
Partnership is backed with capital provided by its senior management and by Cinven, an independent investor. It is Partnership's substantial financial backing that has given us the freedom to focus on what we do best - developing and delivering enhanced financial plans for people in ill health.