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Daily Insurance Industry News
Saturday 17th of November 2018
April 30, 2009

Standard Life reports 20% slide in sales

by Gill Montia

Story link: Standard Life reports 20% slide in sales

Standard Life reports 20% slide in sales

Standard Life has reported a 20% fall in sales during the first quarter of 2009.

Worldwide life and pensions sales declined to £3.6 billion, down from £4.5 billion in the same period in 2008, while in the UK new business sales fell 27% to £2.5 billion.

However, the company said its first-quarter figures were better than expected, given that market losses had an “inevitable impact” on its asset management business.

With regard to the UK business, a number of one-off factors also came into play, including lower margin bulk investment bond deals written in 2008 that have not been renewed.

In addition, the group undertook a revaluation of its Pension Sterling Fund (PSF) in January and agreed to restore the value of the fund with a £100 million injection of cash.

The £2.4 billion PSF had invested in mortgage-backed securities and lost just under 5% of its value, or around £1,237 per investor.

Savers claimed that they were not aware that the fund held asset-backed securities in addition to deposits in banks and building societies.

Standard Life eventually admitted that the supporting literature for the PSF was below standard and may not have fully explained the fund’s risk profile.

The group’s chief executive, Sir Sandy Crombie summed up the months ahead as follows: “We expect conditions in 2009 to remain challenging across all our markets. Our strategy remains unchanged and we continue to develop innovative and capital-lite propositions, to maintain strong distribution relationships and to deliver excellence in customer service.”

The insurer’s capital surplus stood at £3.2 million at the end or March, compared with £3.3 million at the end of December.

 

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