Standard Life has recorded a 71% jump in operating profits for the first half of 2007.
In its interim results released to the stock exchange this morning, the insurer says its European Embedded Value profit climbed to £353m, up from £206m at the corresponding point last year.
New business contribution to profit climbed 66% to £151m for the period, from £91m last year.
It also announced its interim dividend increased 5.6%, to 3.8p.
UK life and pensions before tax EEV operating profit leaped 70% to £252m, from £148m in H1 2006.
Net UK pensions inflows fell from £1.8bn in the first half last year to £1.5bn, while net life outflows were a little less in H1 2007, down from £600m to £300m.The group says the improving trend in underlying net flows has been achieved against a backdrop of claims activity across its life and pensions portfolios being above expected levels. In line with normal industry practice, it intends to review its lapse assumptions as part of the year end review.
Standard Life says it expects the UK life and pensions market to experience solid increases in the medium term.
“Over the coming months we expect to exceed market growth as we continue to enhance our SIPP proposition and to leverage it into the group pensions market,” it says.
On the mortgage side, it recorded a 29% jump in gross lending, to £1.6bn; while its 0.18% arrears rate 2007 continues to be below the 1.15% industry average.
Standard Life Group chief executive Sandy Crombie says the company has enjoyed a successful first year as a listed company and is “growing strongly and profitably”.
"We have made significant progress in increasing margin in our UK business over the first half of 2007, thanks to strong growth in higher margin products supported by the continued improvement in underlying efficiency,” he says.
“We are on track to meet our target of a 9-10% return on embedded value in 2007 and increasing thereafter.
"I am pleased to be able to announce the payment of our first interim dividend to our 1.5 million shareholders of 3.8p per share on 30 November 2007, representing a growth rate of 5.6%.”
Standard Life also says it plans to reduce underlying costs by a further £100m by 2009.
“Our strategy of concentrating on more profitable, less capital intensive products offering attractive rates of return, along with the cost efficiency initiatives announced, will ensure that this growth is converted into improved profitability,” it says.
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