Standard Life in sales dip but benefits from market rebound

Oct 30 2009 by John Cranage, Birmingham Post

Life and pensions group Standard Life had a 20 per cent slump in third quarter UK sales yesterday but has benefited from the stock market rebound.

The Edinburgh-based insurer, which this week announced a £226 million sale of its banking business to Barclays, said it was affected by moves not to renew some bulk deals while the recession also impacted company pension business.

Its third quarter sales decline left UK life and pensions new business for the year to date down 23 per cent at £7.26 billion, although worldwide sales were helped by better performances in Canada and Asia, down 15 per cent.

However, the recent rebound in equity prices has boosted the value of its assets under management and net inflows.

At its fund management arm, Standard Life Investments, total assets under management rose by £15.3 billion to £136.9 billion during the third quarter, thanks to a record rise in third party assets.

Pension funds also recovered, with its DIY-style self-invested personal pensions assets up by £1.3 billion to £11 billion and group pension assets rising 16 per cent to £17.1 billion since June.

The group’s capital buffer – a regulatory requirement for balance sheet strength – rose again to £3.4 billion.

Chief executive Sir Sandy Crombie was “particularly pleased” with the recovery in assets under management. “This should benefit the group’s profits and cash flow in the years to come,” he said.

Sir Sandy confirmed his end-of-year departure date last week after naming finance director David Nish as his successor. He will stand down after 43 years with the insurer and five years at the helm but will remain with the business until the end of next April to ensure a smooth transition.

Meanwhile, in a busy past month for Standard Life announcements, the group is finalising the deal with Barclays to off-load its banking arm.