Standard Life posted one of the UK sector's strongest growth rates for 2006 as new pension rules at home helped lift full-year sales by 47 per cent and the insurer said it expected the momentum to continue into 2007.
But the former mutual said lapses in both life and pensions policies remained "above trend" as customers cashed them in following its July initial public offering and changes to pension legislation in April. The company had boosted lapse provisions at the half year.
Standard Life said today its sales rose to £14.26 billion ($27.90 billion) from £9.68 billion last year on a present value of new business premiums (PVNBP) basis.
Under the alternative annual premium equivalent (APE) basis - which smoothes out the sales of single-premium policies which account for most of the insurer's sales - Standard Life said full-year sales rose 39 per cent to £1.73 billion, towards the higher end of market estimates.
"This is a great result at a time when the company was executing massive corporate change," Chief Executive Sandy Crombie told reporters. "Overall the business is moving in the direction we envisaged when we carried out a strategic review in 2004.
Standard Life's focus on pensions has made it a key beneficiary of the British government's pensions overhaul last spring, which allowed people to save more for retirement and drove sales of its key self-invested personal pension (SIPP).
Sales in the insurer's core domestic market climbed 69 per cent in 2006 to £11.4 billion on a PVNBP basis. Under APE, sales climbed 54 per cent for the 12 months and 86 per cent in the fourth quarter, helped by a corporate pensions contract.
Lapses at home, however, remained strong.
Standard Life announced a 100 million pound increase in provisions for policy lapses last September. It said on Wednesday that it was too soon to say whether it would take an additional charge.
Agencies