Standard's sales leap as market improves

UK sales leapt 38 per cent, to 2.88bn, over the last three months of 2009, limiting the decline in worldwide new business over the full year to seven per cent – far better than expected in the market.

Edinburgh-based Standard Life – which recently appointed finance chief David Nish as its new chief executive – said it had seen record levels of third-party assets under management as investor nerves eased amid recent stock market rises.

Jackie Hunt, interim chief financial officer at Standard Life, said there was a definite "improved market sentiment", with investors moving from heavy cash holdings into more investment, risk-based products.

Shares in the group rose four per cent as investors cheered signs of a recovery in demand for pensions and equities-based products, with other insurers, such as Prudential and Legal & General, also benefiting from a shares boost.

Standard Life's fourth-quarter hike in sales showed a marked improvement on the 20 per cent plunge recorded in the previous three months.

New life and pensions business still declined by 10 per cent, to 10.1bn, over the full year after a tough first half. But UK pensions business soared by 42 per cent over the final quarter, with demand shooting up for its DIY-style self-invested personal pensions (SIPPs).

By the end of the year, it had 27 per cent more SIPP accounts and 36 per cent more SIPP funds under management, at 11.8bn.

A rush for customers to take retirement benefits ahead of the minimum age increasing from 50 to 55, provided another surge in activity, resulting in a short-term rise in pension outflows.

Standard Life said there was also more business in the corporate pensions arena – a sign the wider economic recovery was beginning to feed through.

Pension and protection providers had been hit hard by the the recession as job losses and lower wages meant less group corporate business.

The housing market slowdown also impacted sales of related insurance products.

Over 2009, Standard Life's protection sales plunged by 71 per cent, but doubled in the last three months.

The group said it saw "good prospects" for its SIPP and group pensions offerings, as well as its wrap investment platform – an online portfolio management system which more than doubled funds under management in 2009.

Barrie Cornes, analyst at Panmure Gordon, said: "With a new management team and a strong fourth-quarter sales performance, the outlook going into 2010 looks positive."