Standard Life beats forecasts in first quarter

UK life insurer Standard Life has increased its global life and pension sales by 25 per cent in the first three months of 2011 compared with the same quarter last year.

The present value of new business premiums (PVNBP), a measure of the company’s sales value, rose to £5.8bn from £4.7bn in 2010, comfortably beating analyst forecasts for a 6-8 per cent rise to about £5bn.

Its UK sales as measured by PVNBP also beat forecasts, rising 18 per cent to £3.97bn from £3.4bn in the first quarter of 2010, significantly over the expected seven per cent rise.

Chief executive David Nish said Standard Life’s corporate business won 46 new scheme contracts to manage 14,000 more employees’ pension plans.

“We have made a good start to 2011. Strong sales across our long-term savings business are evidence that our market-leading products and platforms are performing well,” he said.

“Our strategy is driving further asset growth and will deliver increased future cash flows and profit generation.”

However, Standard Life missed some targets – group assets under administration rose marginally to £198.4bn from £196.8bn in 2010, which fell below forecasts for £200.7bn.

Shore Capital analyst Eamonn Flanagan also said the reliance on low-margin business was a cause for concern.

"The bulk of the UK growth emanated from the lower margin corporate pensions business (+78 per cent) whilst the two per cent reduction in new Self-Invested Personal Pension (SIPP) business concerns us," he said.

And third party managed funds excluding the UK and India saw net inflows of just £1.2bn, down from £1.99bn in 2010 and below forecasts for £1.7bn.

However, its UK third party funds saw net inflows of £808m – a 260 per cent increase on the £223m recorded in the first quarter of 2010.