STANDARD Life shrugged off the woes of the wider economy yesterday, posting a 51 per cent rise in first-half profits and claiming that the outlook for the company remained strong.
The Edinburgh-based insurer reported a better than expected 5 per cent rise in worldwide life and pensions sales, which were expected to fall slightly, to £9.1 billion.
Chief executive Sandy Crombie said that despite market conditions remaining "
difficult", the future for Standard Life was positive.
"The business is performing in a very robust manner in quite difficult conditions," he said.
"We're not really exposed to discretionary spending because we're not at the fringe of savings activity. It's mainly assets in existence somewhere seeking a new home."
Sales in the UK fell by 1 per cent but Crombie said the company was pleased with trading in its largest market, blaming a fall in asset values rather than a fall in demand.
Growth was strongest in the group's Chinese and Indian operations, where sales more than doubled compared with the first half of last year.
Crombie said the number of customers taking self-invested personal pension (Sipp) products had risen by a quarter in the first half, but because the value of the products transferred to the company had dropped, Sipp assets under management grew by only 12 per cent. Standard Life, which makes higher margins off Sipps than other pensions, plans to launch five new products in the second half, to grab a larger share of a market it predicts will be worth £100bn by 2011.
The former mutual reported an operating profit of £534 million in the six months to 30 June, near the top end of market expectations.
The figure was flattered by a deal to reinsure £6.7bn of its UK annuity liabilities in February.
Reducing its exposure to increasing life expectancy, the deal created a one-off gain of £119m, transferred to operating profits.
But even excluding the transaction with Canada Life, operating profits were up 18 per cent.
Finance director David Nish said the deal, which offloaded more than half of the company's annuity liabilities, was unlikely to be repeated on a similar scale, but the company was constantly on the lookout for deals to improve the value of its business.
Analysts at UBS said the figures showed a "generally resilient" performance in difficult markets.
Trevor Matthew, the former head of Standard Life's UK business, will today present his first results as chief executive of Friends Provident, after quitting in January.
Crombie, who is currently filling Matthew's former role, said the process to recruit a permanent replacement was continuing.
Shareholders in Standard Life were cheered by a 7 per cent increase in the interim dividend to 4.07p. Standard Life shares, which had climbed 9 per cent on Tuesday, dropped a penny to 243.25p yesterday.
The full article contains 480 words and appears in The Scotsman newspaper.
