A drop in sales of fixed-rate annuities dented first-half profits at insurer and asset manager Standard Life.

British life insurers have been looking for new sources of business after reforms this year removed the requirement for retirees to use their pension pots to buy a fixed-rate annuity.

Standard Life reported a £39 million reduction in its margin from "spread/risk" business such as annuities in the six months to June 30 compared with the previous year.

This was due both to lower annuity sales and a drop in asset liability management - in which insurers match assets more closely to liabilities, often using derivatives.

Standard Life has been switching focus to "fee-based" business such as more flexible drawdown pensions and its asset management arm.

"Fee business continues to drive performance - 95 percent of our income is coming from fee-based propositions," outgoing chief executive David Nish said.

Standard Life said it expected annuity new business to drop by £10m to £15m this year and asset liability management to drop by £30m to £40m compared to 2014.

Keith Skeoch, chief executive of Standard Life Investments, will take over from Mr Nish as group chief executive on Wednesday.

Mr Skeoch said he would also continue to run the group's fund management arm "for the foreseeable future".

Standard Life's operating pre-tax profit from continuing operations rose six percent to £290m in its fiscal first half.

Assets under administration rose two per cent from December 2014 to £302.1 billion, in volatile markets.