(Reuters) — British life insurance and pensions group Legal & General Group P.L.C. posted better-than-expected profit in the first half of the year, boosted by sales of high-margin pension services to companies.

It said sales of so-called "bulk annuities" to firms looking to outsource all or part of their pension plan liabilities to the insurer had more than quadrupled premiums to £3.1 billion ($5.22 billion) and pushed annuity assets up 20% to £38.5 billion ($64.77 billion).

That helped operating profit from the company's retirement business hit £188 million ($316.3 million) in the six months to the end of June — above a company-supplied consensus for £176 million ($296.1 million) — and pretax profit climb 7% to £636 million ($1.07 billion).

The 177-year-old life group said it was well-positioned to profit from changes to the pensions market announced in March by British Finance Minister George Osborne and was developing new retirement products following the changes.

The reforms included scrapping a requirement for savers to buy an annuity, a financial instrument that pays out an income for life, from an insurer upon retirement.

While all insurers have seen their business hit, L&G has been supported by its dominant position in the bulk annuities business, which continues to see strong growth.

"It's no use us moaning and groaning about the change in the annuities market. It was the right thing for (Osborne) to do," Chief Executive Nigel Wilson told reporters on a media call.

"It's going to cause some short-term issues for those who are totally dependent on individual annuities — we're clearly not and we have to transform our business."

While the new rules are designed to give individual pensioners more investment choices, many employers prefer buying annuities in bulk to tidy up their balance sheets and remove the liability of owing a pension.

Mr. Wilson said L&G would also be looking at lifetime mortgages, the greater use of income drawdown products, and that the pension changes were a good thing in the long run.

The company said it expected individual annuity sales to halve in 2014 and halve again in 2015 as people with larger retirement pots move to the new drawdown products, mirroring comments from peer Standard Life P.L.C. on Tuesday.

Shares in Legal & General were up 0.3% at 1017 GMT, among the top gainers in a 1% weaker FTSE 100 and in contrast to insurer Friends Life, which fell 1.2% after its results.

L&G's insurance business posted mixed results, with premiums at its British protection business up 7% year on year, but general insurance gross premiums down 3%.

Operating profit at its general insurance arm fell to £28 million from £39 million ($47.1 million from $65.6 million) in 2013 after a £12 million ($20.2 million) hit for additional weather-related claims, the company said.

Assets under management at its Legal & General Investment Management unit, the division that invests on behalf of the insurer and external clients, climbed 7% to £465.1 billion ($782.48 billion).