Equities are 'Archilles Heel' of Standard Life, says Cazalet

Standard Life's bet - that the stock market would provide the returns needed to meet guaranteed annuity rate promises - has backfired because of an excessive equities weighting in the face of a prolonged bear market, says consultant Ned Cazalet. Cazalet does not say, as some have suggested in the weekend press, that the company has to dig up £2.5bn in cash to pay its GAR policyholders. What he does say is that the reliance on equities in the past two years has eaten into capital reserves to the extent that even a slight recovery in the stock market this year is not going to re...