Standard Life Reports Slowdown
Insurer Standard Life has today announced a slowdown in top line revenues over the last quarter of 2007, despite the fact that the group reported an increase of 15% in its domestic pensions and life businesses over the course of last year, in light of difficult market conditions and growing competition.
Over the last quarter, however, the revenue from UK life sales and pension sales was down 20% on last year’s performance, coming in at a worse than expected £2.92 billion for the period, reflecting a general slowdown in demand for its products.
As a result of the news, shares in Standard Life were down by over 3% through morning trade, particularly with the announcement that boss Trevor Matthews was to leave for a position at rival insurance group Friends Provident.
The well respected executive will move on to take up post at Standard Life’s rivals, in what has been seen as a blow for the group, particularly in light of their current difficulties, which have been forecast to continue over the course of 2008 in line with ongoing market problems.
The news also prompted Standard Life to begin storing additional financial provisions in order to contend with the threat of customers opting to cash in their policies before maturity, as a further measure to prevent financial exposure.
“We have seen that lapse rates, particularly for the older products, have continued above long-term assumptions, so we will be making additional provisions at the year-end. The important thing is we will reach our financial targets for this year, notwithstanding the size of any additional charge we make,” said David Nish, finance director.
Category: Standard Life News
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