| Repositioning causes Standard Life’s revenues to decline |
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LONDON: Europe’s largest mutual insurer Standard Life yesterday confirmed analysts’ belief that the firm was deliberately causing sales to decline this year so that it could project strong sales growth at its planned listing on the FTSE 100 next year.
While reporting a 7 percent drop in insurance revenues in third quarter, year-on-year, the firm explained that it was the result of a repositioning strategy. The firm plans to concentrate on more profitable business areas instead of desperately trying to increase market share which has declined from 9.6 percent in Q1 to 7.7 percent at the end of Q3. The firm is expected to demutualise and get listed on the London stock exchange in the summer of 2006.
The Q3 results are in line with the firm’s expectations and proved the effectiveness of their strategy “in establishing a sound base from which to grow the business” said chief executive Sandy Crombie.
Revenues declined despite a 208 percent surge in self-invested personal pensions (SIPPS) at £27m. Sipps is one of those more profitable areas on which the firm will concentrate, expecting market conditions to improve after reforms are announced in April.
The firm’s banking arm saw gross mortgage dropping 28 percent at £848m reflecting the continuing slump in the property market.
Total new insurance revenues for the first nine months increased by 17 percent, while group funds under management in the same period, were up at £124 billion an increase of £16 billion.
The firm also warned that price competition would continue to keep conditions tough in the insurance market.
Posted
on : Thu, 10 Nov 2005 16:15 GMT | Insurance News
By : Chris Rowe
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