Figures released for the six months to 15 May show Standard Life suffered from uncertainties sparked by moves towards demutualisation, although business overseas helped offset sales falls in the UK.
Overall UK sales on an annual premium equivalent were just 4% down on the same period last year, the interim results show.
However, in the life and pensions arena, sales were at times exceptionally poor as the company deliberately took steps that hurt turnover as part of the reorganisation going on to bring about a listing on the stock market.
Overall UK life and pensions sales on an APE basis were down 11% on the first half of 2003. Contrast that with the 193% and 22% gains respectively in UK investment and general insurance businesses on the same basis.
Sales of individual pensions in the UK fell 22% compared to the first half of 2003.
“Standard Life believes this is a result of consumer uncertainty following developments in the company earlier in the year,” the results state.
Sales of annuities were down 38% on the same period last year as the company continued to “limit its exposure”.
Group pension sales did better, with group DC pension sales up 14% to £186m.
Protection sales dropped 62%, again because of “holding back” as a result of ongoing restructuring because of the planned demutualization.
Sales of with profits declined as a proportion of overall life and pensions business for the third year running.
At 17% of total UK life and pensions sales, the proportion is down from 25% at the same time last year, and 42% in the first half of the 2002 financial year.
ABI figures quoted by Standard Life show its share of the IFA market fell in the first quarter of 2004, but the company plans product launches and “enhancements” in the second half of the year to combat this trend.
The with profits free asset ratio was 14.1% at the end of the period reported, down from 14.6% at the end of the 2003 financial year. Strains from writing new business, paying bonuses and setting aside more provision for mortgage endowment compensation claims all contributed to pressure on the difference between assets and liabilities.
Standard Life will publish both realistic and statutory solvency figures in its 2004 year-end results, the company says.
“Standard Life’s financial position remains secure” the document states.IFAonline
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