Partnership Assurance eyes company pension deals as individual annuities fall

* FY operating profit down 51 pct to 64 mln stg

* Individual annuity sales fall 57 pct to 466 mln stg

* Tempered by near three-fold increase in bulk deals

* Bulk deals expected to total at least 200 mln pounds this year (Adds detail, share price, CEO comment, analyst comment, Just Retirement)

By Carolyn Cohn

LONDON, March 3 (Reuters) - Partnership Assurance, a UK provider of specialist retirement products, has forecast a strong performance this year in its company pension operations, a vital growth area since government reforms mean individuals are no longer forced to buy annuities.

The company on Tuesday posted a halving of full-year operating profit to 64 million pounds ($98 million), reflecting a loss of business after the reforms which free individual pensioners from the compulsion to use their pension pots to buy an annuity, giving a regular income for life.

However, since the announcement of the pension reforms which take effect this year, Partnership and other annuity providers have found new business in the sale of bulk annuities, taking on companies' final salary or defined-benefit schemes.

"We have a fast-growing defined-benefit market ... we are now guiding people towards a continuing strong performance for this year," Partnership Chief Executive Steve Groves told Reuters.

Individual annuity sales fell 57 percent to 466 million pounds last year, Partnership said, but there was a near three-fold increase in bulk annuity sales to 247 million pounds.

Bulk annuity sales could total at least 200 million pounds this year, added Partnership, which specialises in providing policies for people who smoke or have other medical factors giving them a shorter life expectancy.

Partnership's shares, which rose on Monday to their highest since a year ago when the annuity reform plan was first set out, were down 3 percent at 143.5 pence by 1008 GMT. The stock slumped 52 percent last year but has recovered sharply from its 84.7p low.

Eamonn Flanagan, analyst at brokerage Shore Capital, said recent share gains were "appropriate given the potential for continued new business development".

Partnership's main rival Just Retirement (LSE: JRG.L - news) last week reported a relatively modest 4 percent fall in total annuity sales for the first six months of its financial year, fuelling a share price rally.

Partnership also said it was planning to offer annuities in the United States to fund long-term care. Its UK care annuities saw a 15 percent rise in sales to 76 million pounds.

Operating profit of 64 million pounds was slightly above a forecast 61 million, according to a company-compiled consensus.

The company will pay a final dividend of 1 penny per share, bringing its total for 2014 to 1.5p. It said it was keeping its dividend policy under review due to the uncertain outlook. ($1 = 0.6504 pounds) (Editing by Simon Jessop and David Holmes)