Standard Life has set its stall firmly in the single premium investment-led market, as new business figures released this morning reveal the company is seeing growth on the back of its new direction.
According to Q1 2006 business figures, the Edinburgh-based mutual life insurer - which is now seeking the member support for an LSE listing this summer - saw UK life and pensions annual premium equivalent sales increased by 13% to £263m, as a result of improved interest in its range of single premium self-invested personal pensions, investment bonds, trustee investment pension plans and personal pensions offerings,
Single premium business rose by 52% to £1.5bn, and accounted for 46% of its UK life and pensions APE book of new business, led in the main by a huge jump in sipp sales – up 79% to £341m – as well as its launch into the offshore arena with the unveiling of its international bond.
In contrast, however, regular premium sales fell 14% while group pension APE sales dropped 20% and individual regular premium pensions business fell 35% to £13m, as a result of it shift in business direction and a change in the commission structure to IFAs, says Standard Life.
The fall in group pension sales was mitigated to some extent, however, by the launch of Standard Life’s group sipp product, say officials, “which offers some innovative commission options which result in less new business strain”.
Elsewhere, Standard Life has seen an increase in protection business – APE sales doubled to £2m – and Standard Life Investments saw funds under management reach £125bn thanks to gross investment sales in the first quarter of 2006 of £2.45bn.
Commenting on the mutual insurer’s improved single premium business figures, group chief executive Sandy Crombie says early performance for the year indicates its new business direction is generating results.
“Standard Life has made a strong start to 2006. The results for the first quarter demonstrate the success of our repositioning. We made a decision to change our business mix, particularly within UK life and pensions, to place emphasis on writing investment-driven single premium business and products with lower new business strain, Coupled with excellent progress at Standard Life Investments, the group is well positioned for the coming year,” adds Crombie.
While worldwide insurance sales are also up 7% to £342m, the group has seen a significant fall in new business from Germany of 70% to £10m, but Standard blames on “unusually high figures” in the same period last year as a result of legislative tax changes effective from 1st January 2005.
Gross mortgage lending also fell 4% to £596m at Standard Life Bank while healthcare new business sales are unchanged against Q1 2005.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Julie Henderson on 020 7968 4571 or email [email protected].IFAonline
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
Follows string of appointments
Follows acquisition of BlackRock's DC platform
‘In the know’
£116.8m of benefits received by customers