Standard Life boosted by a return to risk

STANDARD Life said high street savers’ appetite for equities and fixed income would continue to return this year as it beat market expectations to deliver a 30 per cent rise in sales.

The Edinburgh-based insurer posted first quarter sales of £4.6bn, nearly £1bn more than analysts expected. Other stocks in the sector were buoyed as Standard Life said the growth was driven by customers buying self-investment personal pensions (SIPPs), wraps and mutual funds.

Jackie Hunt, the group’s newly appointed finance director, told City A.M.: “In 2009 we saw nervousness across all asset classes, and as a result huge amounts of money flowed into cash. Today people are more confident they understand where toxic assets are and what assets they hold.”

Hunt said the pick-up in investors’ willingness to take risk began in the fourth quarter: “It’s still relatively fragile, but we think it’s sustainable.”

Net inflows at Britain’s fourth-largest insurer more than trebled from £600m in the first quarter of last year to £2.1bn, with assets under management up seven per cent to £182bn.

The amount of money managed through SIPPs rose nine per cent to £12.8bn. Cash managed in mutual funds and products by sister Standard Life Investments also jumped nine per cent to £62.2bn.

Kevin Ryan, an analyst at ING, said: “What we’d all underestimated was the resilience of the man and woman on the UK high street to go out and buy financial products. There has been a huge surge back.”

Shares in Standard Life, which have lagged those of competitors such as Prudential and Aviva over the past 12 months, closed 4.4 per cent up at 202p. Barrie Cornes of Panmure Gordon switched his rating from “hold” to “buy”.

He said: “The share price is still too low. Over the past year [the stock] has just been left behind.”


JACKIE Hunt takes the top finance job at Standard Life at an opportune time.

With customers’ cash beginning to flow back into higher-margin products such as managed funds, Hunt insists the UK remains attractive as a source of both income and growth.

“Clearly the UK is a more mature market [than Asia],” she says, “but it’s a market in which there are huge piles of savings and a lot of investments. We are confident of the prospects.”

Hunt replaces David Nish, who became chief executive in January. She brings a wealth of experience to the role after previous stints at Norwich Union Insurance, Aviva offshoot Hibernian Group, Royal & Sun Alliance and accountant PwC.