LONDON (Reuters) - Legal & General Plc (>> Legal & General Group Plc) on Wednesday became the latest insurer to report a drop in demand for personal annuities and growing reliance on sales to companies, as full-year profits just lagged forecasts to send its shares lower.

The UK life insurance industry has been shaken by pension reforms to be implemented next month, which allow retirees to use their pension pots as they choose rather than being compelled to buy an annuity giving an income for life.

L&G said sales of individual annuities fell 54 percent last year and it expected a further halving in 2015. But sales doubled of "bulk" annuities, which transfer the risk of defined benefit, or final salary, pension schemes from companies to insurers.

L&G Chief Executive Nigel Wilson said he expected more to follow. "You never meet a CFO who says 'boy, I'd like some more pension risk' - there's plenty of demand," he told reporters.

Annuity providers Just Retirement (>> Just Retirement Group PLC) and Partnership Assurance (>> Partnership Assurance Group PLC) have also seen an increase in bulk annuity sales.

Ultra-low interest rates have led to record deficits in defined benefit schemes, which as a whole are only 78 percent funded. Some industry specialists say more than 1 trillion pounds in UK defined benefit assets are ripe for transfer to insurers, if the schemes can afford the insurance costs.

Globally, around $10 trillion worth of liabilities could be subject to the same trend over the next couple of decades, L&G said, citing industry estimates.

L&G's yearly operating profit rose 10 percent to 1.28 billion pounds, short of the 1.31 billion average forecast in a company-supplied poll of analysts.

L&G also appointed Gene Gilbertson as interim president of its U.S. unit, replacing Jimmy Atkins who is leaving to pursue other interests after the unit suffered a more than 30 percent profit drop.

L&G shares, which hit a record high on Tuesday, fell as much as 5 percent and were down 3.5 percent by 10 a.m..

"These results appear more an affirmation of previous trends, rather than something to trigger estimate moves or a re-rating event," analysts at Mirabaud said.

In India, Wilson said L&G was considering whether to raise its stake in its insurance joint venture, but regulatory constraints meant it was also looking at other areas of development, such as mobile phone insurance or fund management.

The company's total yearly dividend will raise 21 percent to

11.25 pence per share.

(Editing by Sinead Cruise and David Holmes)

By Carolyn Cohn