Underlying profit at Scottish Widows fell 13% to £837 million in 2016 as the company felt the effect of “recent reforms on activity within the pensions market.”

As parent Lloyds Banking Group — which also owns Bank of Scotland and Halifax — announced its 2016 pretax profit more than doubled to £4.2 billion, it said a 17% increase in new business income at Scottish Widows “was more than offset by adverse economics impacting existing business income together with increased investment costs.”

Scottish Widows’ life and pensions sales — on a present value of new business premiums (PVNBP) basis — fell 6% to £8.9 billion.

Lloyds’ results said Scottish Widows had more than £110 billion of funds under management and that Widows “paid a further £500 million to the group in February 2017, bringing total dividends paid since the formation of the group in 2009, to £7.1 billion.”

The results showed corporate pension, planning and retirement funds under management “increased to over £42 billion reflecting net inflows and positive market movements.”

The results also revealed that Widows “successfully completed four bulk annuity transactions in 2016, taking the combined external deal size to over £1.85 billion since entering the market in late 2015.”

Lloyds said Widows “continued to leverage group capabilities to source attractive, low risk, higher yielding assets to back annuity liabilities” adding that total assets acquired to date were £7 billion.