Standard beats profit expectations

Scottish insurance giant Standard Life announced better-than-expected annual profits yesterday, together with plans for a further £100million of efficiency savings by 2012.

The Edinburgh-based company said a 2009 operating surplus of £919million – well above City forecasts of about £662million but down by 1.5% on a year earlier – represented a good performance during an uncertain time for financial markets.

David Nish, who took over as the group’s chief executive from Sir Sandy Crombie on January 1, said: “2009 was a successful year for Standard Life in which we delivered against our strategic objectives and built a strong platform for future profitable growth.”

Some analysts were not overly impressed by last year’s performance, saying the profits included £349million of one-off charges without which the headline figure would have been broadly in line with forecasts.

Kevin Ryan at financial service conglomerate ING said: “It is doing well in difficult circumstances but that is about the best you can say.”

Standard Life’s pre-tax profits for 2009 came in at £474million, against losses of £158million the year before.

The firm said it had started the new year in a healthy position after the return of investor appetite resulted in a 38% leap in UK sales to £2.88billion over the final three months of 2009.

It made savings worth £47million last year towards its target of £75million by the end of 2010 and is looking to boost margins with a further £100million by 2012, including from technology and procurement.

The efficiencies achieved last year included the restructuring of European customer-service operations and the outsourcing of some information-technology development. Further measures are unlikely to have any impact on jobs, according to sources.

Standard Life, which employs about 10,000 people, also said it aimed to spend more than £200million to develop and promote its products in retail and corporate markets during the current year.

The group’s UK life and pension business reported a 3% drop in operating profits to £649million last year.

Assets under administration increased by 11% to £105.6billion, while the contribution from new business decreased to £139million from £199million 12 months earlier. Shares in the insurer rose 4.1p to 208.3p.