Legal & General is set to log higher earnings this year because customers are dying earlier than expected.
The insurer said it could end up releasing more cash from its reserves, which are meant to help pay annuity customers on its books.
It comes after a recent review of existing data and longevity trends found “evidence of higher-than-expected mortality”.
People dying more quickly means cash set aside to pay future pension payments can be released.
L&G said it is now expecting a £300 million to £400m release of cash reserves, which will bolster its full-year results.
Steve Clayton, a fund manager at Hargreaves Lansdown said: “Part of L&G’s business is life assurance and, in that line of business, good news for the company is bad news for the rest of us.
“The company expects to make a longevity reserves release of over £330m later this year, reflecting the fact that we’re not living as long as we were once expected to. “
Shares were down around 1.2% in midday trading.
In a half-year trading update, L&G disclosed that profits slipped as the firm was stung by volatility in global financial markets.
In the six months ended June, the firm saw pre-tax profit decrease 19% to £942m.
The group attributed the drop to “lower positive investment variance” as a result of market turbulence in the first quarter.
Operating profit was up 7% to £1.06 billion as five out of six of its divisions recorded underlying earnings increases.
Mr Clayton added: “Overall, L&G look to be performing to plan. LG Investment Management funds under management are £985bn and look well set to reach £1 trillion assets before too long.
“The group’s strength in pension risk management is allowing it to take on large mandates from pension funds where trustees are looking to manage their liabilities.”
Chief executive Nigel Wilson said the group delivered “consistent, positive results” for the first half of 2018.
“We are reviewing our long-term mortality assumptions and expect to make a full-year release in half two which will be larger than the £332 million released for full-year 2017.”