Standard Life met expectations with a 12 per cent rise in 2007 sales today but signalled a tougher 2008, as analysts said the surprise departure of a top executive overshadowed the numbers and battered its shares.
The British life insurer is already facing questions about its strategy and credibility after a failed cash-and-shares bid for rival Resolution last year.
The departure of Trevor Matthews, head of Standard Life's core UK retail unit, is a further setback for the company. Industry veteran Matthews, credited with much of the insurer's turnaround and frequently named as a potential CEO, resigned from the former mutual late yesterday to join rival Friends Provident as chief executive.
Sandy Crombie, who will take on UK financial services in the short term, said on a conference call that the group would "take its time" in deciding how to replace Matthews.
Mr Crombie, who is 58 and has said he plans to retire at 60, declined to comment on his own departure plans.
Standard Life said today that it expected to improve its performance this year and expected growth abroad - but the insurer warned its core UK arm would be affected by volatile investment markets, a downturn in the commercial property sector and tax uncertainties hitting bond sales in the first quarter.
It also said it expected to take additional charges for the full year to cover the cost of lapsing policies, which remain above the group's long-term expectations.
Standard Life took a 207 million pound charge for the UK alone in 2006 to cover increased lapses, as customers cashed in policies following its listing and changes to pension rules.