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Standard Life Group Press Release
Embargoed until 0700 09 November 2005
2005 Third Quarter New Business Performance
•
•
•
•
UK Life & Pensions Annual Premium Equivalent (APE) up 5% to £648m in the nine
months to 30 September 2005 (2004: £616m).
Worldwide APE insurance sales in the nine months to 30 September 2005 of £869m
(2004: £861m).
Group Funds under management up by £16bn to £124bn over the nine month
period.
Third party funds under management at Standard Life Investments up almost £7bn
in the nine months to 30 September 2005 to £25.3bn, aided by record net new
business.
UK Life and Pensions has delivered resilient performance as the repositioning programme continues.
The company’s SIPP product is continuing to demonstrate strong performance with APE sales over the nine
months to 30 September 2005 of £88 million against £24m last year (equivalent product). As we focus on the
more profitable SIPP business, APE sales of UK individual pensions other than SIPP in the nine months to 30
September 2005 were £101 million (2004: £190m).
Group pensions APE sales over the nine months to 30 September 2005 were £277 million (2004: £264m).
Within the Group pensions market, the company has however seen a reduction in volumes in the third quarter.
A selective approach to pricing new business opportunities is being taken, with the aim of improving
profitability of this line of business.
APE sales of UK Life and Pensions investment products in the nine months to 30 September 2005 were £151
million (2004: £87 million), supported by an expanding product range and strong underlying investment
performance.
The Protection market remains highly competitive, with fewer house sales and increasingly strong price
competition.
Standard Life Investments has recorded its strongest quarterly trading period. Worldwide gross fund
inflows for the third quarter rose to over £1bn, up from £233m in the same period last year. Standard Life
Investments now manages £112.5bn, of which third party funds under management represent £25.3 billion, an
increase of £3 billion over the last three months and almost £7 billion for the year to date. This includes
several significant pension fund mandate wins during the third quarter, driven in part by strong investment
performance.
Standard Life Healthcare achieved sales of £15 million (2004: £23 million) during the nine months to 30
September 2005, reflecting a more focused approach on assessing the profitability of new business
opportunities. During the period, the company signed a sale and purchase agreement for the Private Medical
Insurance business of FirstAssist, which on completion (expected in the first quarter of 2006) should place
Standard Life Healthcare as the third largest provider in the UK health insurance market.
Standard Life Group Press Release
The UK mortgage market remains competitive and Standard Life Bank's gross mortgage lending for the nine
months to 30 September 2005 was £2,290 million (2004: £3,329 million). The mortgage balance ended the
period at £10.5 billion (31 December 2004 £10.2 billion).
Standard Life Canada’s APE insurance sales in the nine months to 30 September 2005 were £119 million
(2004: £117 million). Individual annuities continue to see year on year growth, although Group annuities saw
a fall in APE driven largely by a reduction in regular premium business.
Total APE new insurance business written outside the UK and Canada in the nine months to 30 September
2005 was £87 million (2004: £105 million).
In line with the rest of the German market, sales in Standard Life Germany fell below normal levels
following last year’s business surge ahead of the changes in taxation of pensions, which had a particular
impact in the fourth quarter of 2004. In the nine months to 30 September 2005 APE sales were £51 million
(2004: £71million). Standard Life Ireland’s repositioning exercise continues and APE sales in the nine
months to 30 September 2005 were £17 million (2004: £18 million).
In India the joint venture HDFC Standard Life demonstrated strong growth, with APE sales of £65 million
(of which Standard Life’s share was £17 million) in the nine months to 30 September 2005 (2004: £23
million of which Standard Life’s share was £7 million). The Chinese joint venture Heng An Standard Life
was granted permission to open a branch in Beijing, following the opening of its first branch in Qingdao
earlier this year. The Beijing branch will open for business in early 2006. The sale of Standard Life’s
Spanish subsidiary, Prosperity, was completed in September.
Group Chief Executive, Sandy Crombie, commented:
“2005 is a pivotal year for Standard Life and the repositioning of our business continues. Group funds under
management have reached £124bn, and total new insurance business, represented by single premiums plus
new regular premiums, has risen by almost 17% from £3.9bn to £4.6bn. Although we expect many of our
chosen markets such as group and individual pensions to remain competitive, the results for this third quarter
demonstrate our continued progress in establishing a sound base from which to grow the business.”
Enquiries:
Analysts/Investors
Amanda Forsyth
0131 245 6799 / 07834 256 695
Media
Emma Wylie
0131 245 2967 / 07712 486 444
Scott White
0131 245 5422 / 07712 485 738
Notes to Editors
1. All financial information is unaudited. The financial information shown in the press release has been
prepared under UK GAAP. The group will be preparing its year-end financial statements in
Standard Life Group Press Release
accordance with International Financial Reporting Standards. The subsidiary companies will continue
to prepare their financial statements under UK GAAP.
2. Following the change in 2004 of the Company's year-end from 15 November to 31 December and the
change to calendar quarter reporting, appropriate comparatives for new business APE, investment
sales and gross mortgage lending have been provided for the 9-month period to 30 September 2004.
3. Annual Premium Equivalent (APE) sales comprise new regular premium sales plus 10% of single
premiums.
4. Standard Life participates in two joint-ventures with HDFC: a life assurance company, HDFC
Standard Life Insurance Company, in which it holds 22.4% and HDFC Asset Management
Company, in which it holds 49.9%.
5. Insurance new business and Investment gross sales for overseas operations are calculated using
average exchange rates. The principal average exchange rates used are £1:C$2.25 (2004
£1:C$2.38) and £1:Euro 1.46 (2004 £1:Euro 1.47). Funds under management are calculated using
the closing exchange rate at the period end. The principal closing exchange rates used are
£1:C$2.05 (2004 £1:C$2.29) and £1:Euro 1.47 (2004 £1:Euro 1.46)
Standard Life Group Press Release
The Standard Life Assurance Company New Business
9 month period ended 30 September 2005
Insurance Products
Single Premiums
9 Months to
Pro forma 9
30 September
Months to 30
September 2004+
2005
£m
£m
UK Life and Pensions
SL Healthcare
Canada
International
Total Insurance
3,368
0
620
131
4,119
2,722
0
545
130
3,397
%
Change
24%
0%
14%
1%
21%
New Regular Premiums
9 Months to
Pro forma 9
30 September
Months to 30
September 2004+
2005
£m
£m
311
15
57
74
457
343
23
62
93
521
%
Change
9 Months to
30 September
2005
£m
APE
Pro forma 9
Months to 30
September 2004+
£m
%
Change
-9%
-35%
-8%
-20%
-12%
648
15
119
87
869
616
23
117
105
861
5%
-35%
2%
-17%
1%
Investment Products
£m
Gross Sales
Pro forma 9
Months to 30
+
September 2004
£m
3,832
295
78
4,205
949
172
2
1,123
9 Months to
30 September
2005
UK*
Canada
International*
Total Investment
%
Change
304%
72%
3800%
274%
*Due to the nature of the Indian Investment sales market, Indian new business is shown as net of sales less redemptions. The Triple A fund within UK Investment sales is calculated using average net
client balances.
Banking
9 Months to
30 September
2005
Gross Mortgage Lending
%
Change
£m
Pro forma 9
Months to 30
+
September 2004
£m
2,290
3,329
-31%
+ Following the change in the company’s year end from 15 November to 31 December, and the change to calendar quarter reporting, appropriate comparatives have been provided for the period to 30 September 2004.
Annual Premium Equivalent (APE) is the industry standard for measuring new business income and represents all regular premiums and 10% of single premiums.
Insurance Operations New Business
9 month period ended 30 September 2005
Single Premiums
New Regular Premiums
Annual Premium Equivalents (APE)
Analysed by geographical region
UK
9 Months to
30 September
2005
£m
Pro forma 9
Months to 30
September 2004+
£m
% Change
9 Months to 30
September
2005
£m
Pro forma 9
Months to 30
September 2004+
£m
%
Change
9 Months to 30
September
2005
£m
Pro forma 9
Months to 30
September 2004+
£m
%
Change
Individual Pensions
SIPP & Drawdown
Group Pensions
Investment (including TIPP and PPIP)
Annuities
Protection
Other
Life and Pensions
547
780
283
1,512
245
0
1
3,368
1,014
242
295
871
295
0
5
2,722
-46%
222%
-4%
74%
-17%
0%
-80%
24%
46
10
249
0
0
5
1
311
89
0
234
0
0
11
9
343
-48%
0%
6%
0%
0%
-55%
-89%
-9%
101
88
277
151
25
5
1
648
190
24
264
87
30
11
10
616
-47%
267%
5%
74%
-17%
-55%
-90%
5%
SL Healthcare
0
3,368
0
2,722
0%
24%
15
326
23
366
-35%
-11%
15
663
23
639
-35%
4%
333
284
3
620
281
263
1
545
19%
8%
200%
14%
0
22
19
41
0
32
15
47
0%
-31%
27%
-13%
33
50
20
103
28
59
15
102
18%
-15%
33%
1%
0
620
0
545
0%
14%
16
57
15
62
7%
-8%
16
119
15
117
7%
2%
91
27
5
0
5
3
131
93
20
5
0
3
9
130
-2%
35%
0%
0%
67%
-67%
1%
8
48
0
0
17
0
73
9
69
1
3
7
0
89
-11%
-30%
-100%
-100%
143%
0%
-18%
17
51
1
0
17
0
86
18
71
1
3
7
1
101
-6%
-28%
0%
-100%
143%
-100%
-15%
131
130
1%
1
74
4
93
-75%
-20%
1
87
4
105
-75%
-17%
4,119
3,397
21%
457
521
-12%
869
861
1%
UK Insurance
Canada
Individual Annuities
Group Annuities
Insurance
Life and Pensions
Health and Disability
Canadian Insurance
International (Excluding Canada)
Republic of Ireland
Germany
Spain
Hong Kong
India*
China*
Life and Pensions
Spain General
International (Excluding Canada) Insurance
Total Insurance
* Amounts shown reflect Standard Life’s share of the Joint Venture Company’s New Business
+ Following the change in the company’s year end from 15 November to 31 December, and the change to calendar quarter reporting, appropriate comparatives have been provided for the period to 30 September 2004
Investment Operations
9 month period ended 30 September 2005
UK
Redemptions
Net Inflows
Market & other
movements
01/01/2005
£m
£m
£m
£m
£m
£m
30/09/2005
£m
Mutual Funds
Private Equity
Segregated Funds
Pooled Property Funds
Triple A
2,279
936
2,663
192
2,291
8,361
378
563
1,313
150
1,428
3,832
(230)
(42)
(45)
0
0
(317)
148
521
1,268
150
1,428
3,515
241
20
1,021
39
(221)
1,100
389
541
2,289
189
1,207
4,615
2,668
1,477
4,952
381
3,498
12,976
Mutual Funds
Investment Counselling
541
998
1,539
228
67
295
(56)
(311)
(367)
172
(244)
(72)
191
211
402
363
(33)
330
904
965
1,869
Hong Kong
India
144
901
1,045
0
78
78
0
0
0
0
78
78
29
231
260
29
309
338
173
1,210
1,383
10,945
4,205
(684)
3,521
1,762
5,283
16,228
Net Movement
in FUM
£m
Closing FUM
Total Canada
International
Total International
Total Investment Products
***
****
Net
Movement in
FUM
Closing FUM
Gross Sales
Total UK
Canada
*
Opening FUM
**
Total third party funds under management comprise the investment business noted above together with third party insurance contracts. New business relating to third party insurance contracts is
disclosed as insurance business for reporting purposes. An analysis of total third party funds under management is shown below.
Opening FUM
Investment Products
Third party insurance contracts (new business classified as insurance
products)
Third party funds under management
Total Third Party Funds Under Management – Standard Life Investments
Gross Sales
Redemptions
Net Inflows
*
£m
£m
£m
£m
Market & other
movements
£m
10,945
4,205
(684)
3,521
1,762
5,283
16,228
7,345
18,290
1,053
5,258
(576)
(1,260)
477
3,998
1,206
2,968
1,683
6,966
9,028
25,256
* Other market movements include exchange rate movements, return of capital and adjustments for new money received internally from Group which is reported within non-third party FUM.
**Other movements in respect of Segregated Funds includes an adjustment of £400m for an understatement in earlier periods.
***Due to the nature of the Triple A fund the inflows shown are calculated using average net client balances. Other movements are derived as the difference between these average net inflows and
the movement in the opening and closing FUM.
**** As a result of the sales market volatility in India, Investment sales are shown as the net of sales less redemptions
£m
The Standard Life Assurance Company, New Business
3 month period ended 30 September 2005
Insurance Products
Single Premiums
3 Months to 30
September 2005
UK Life and Pensions
SL Healthcare
Canada
International
New Regular Premiums
%
Change
£m
Pro forma 3
Months to 30
September 2004+
£m
1,240
897
38%
207
45
1,492
181
44
1,122
14%
2%
33%
3 Months to 30
September 2005
APE
% Change
£m
Pro forma 3
Months to 30
September 2004+
£m
64
5
15
17
101
108
7
17
24
156
-41%
-31%
-12%
-29%
-35%
% Change
3 Months to 30
September 2005
Pro forma 3 Months to
30 September 2004+
£m
£m
188
5
36
21
250
199
7
35
27
268
-6%
-31%
2%
-24%
-7%
Pro forma 3 Months to
30 September 2004+
£m
% Change
Investment Products
Gross Sales
3 Months to 30 September
2005
£m
875
UK*
89
Canada
69
International*
Total Investment
1,033
*Due to the nature of the Indian Investment sales market, Indian New Business is shown as the net of sales less redemptions. The Triple A fund within UK Investment sales is calculated using net client balances.
290
50
-107
233
202%
78%
-164%
343%
3 Months to 30 September
2005
£m
Pro forma 3 Months to
30 September 2004+
£m
% Change
848
1,186
-28%
Banking
Gross Mortgage Lending
+ Following the change in the company’s year end from 15 November to 31 December, and the change to calendar quarter reporting, appropriate comparatives have been provided for the 3 month period to 30
September 2004.
Annual Premium Equivalent (APE) is the industry standard for measuring new business income and represents all new regular premiums and 10% of single premiums.
Insurance Operations New Business
3 month period ended 30 September 2005
Single Premiums
New Regular Premiums
Annual Premium Equivalents (APE)
Analysed by geographical region
Pro forma 3
Months to 30
September 2004+
£m
26
0
73
0
0
3
6
108
%
Change
-64%
197%
-29%
241%
-7%
83%
-100%
38%
3 Months to 30
September
2005
£m
11
1
50
0
0
2
0
64
Pro forma 3
Months to 30
September 2004+
£m
67
9
86
20
7
3
7
199
%
Change
-57%
0%
-31%
0%
0%
-31%
-94%
-41%
3 Months to 30
September
2005
£m
26
27
60
66
7
2
0
188
0
897
0%
38%
5
69
7
115
-31%
-40%
5
193
7
206
-31%
-6%
100
104
3
207
83
98
0
181
21%
6%
968%
14%
0
4
7
11
0
5
5
10
0%
-18%
45%
4%
10
14
8
32
8
15
5
28
21%
-9%
51%
14%
0
207
0
181
0%
14%
4
15
7
17
-45%
-12%
4
36
7
35
-45%
0%
33
8
0
0
2
2
45
38
3
1
0
0
2
44
-12%
180%
-71%
0%
0%
19%
2%
2
9
0
0
6
0
17
3
18
0
0
2
0
23
-4%
-52%
0%
-82%
239%
0%
-27%
6
9
0
0
6
0
21
6
18
0
0
2
0
26
-9%
-48%
-75%
-83%
249%
58%
-20%
0
45
0
44
0%
2%
0
17
1
24
-100%
-29%
0
21
1
27
-69%
-23%
1,492
1,122
33%
101
156
-35%
250
268
-7%
3 Months to 30
September 2005
UK
Individual Pensions
SIPP & Drawdown
Group Pensions
Investment (including TIPP and PPIP)
Annuities
Protection
Other
Life and Pensions
SL Healthcare
UK Insurance
Canada
Individual Annuities
Group Annuities
Insurance
Life and Pensions
Health and Disability
Canadian Insurance
%
Change
£m
147
266
92
665
70
0
0
1,240
Pro forma 3
Months to 30
September 2004+
£m
408
89
129
195
75
0
1
897
0
1,240
-61%
208%
-31%
241%
-6%
-31%
-94%
-6%
International (Excluding Canada)
Republic of Ireland
Germany
Spain
Hong Kong
India *
China*
Life and Pensions
Spain General
International (Excluding Canada) Insurance
Total Insurance
* Amounts shown reflect Standard Life’s share of the Joint Venture Company’s New Business
+Following the change in the company’s year end from 15 November to 31 December, and the change to calendar quarter reporting, appropriate comparatives have been provided for the period to 30
September 2004.
Investment Operations
3 month period ended 30 September 2005
UK
Gross Sales
Redemptions
Net Inflows
Market & other
movements
01/07/2005
£m
£m
£m
£m
£m
£m
2,457
1,343
3,699
313
3,647
143
108
520
31
73
70
100
508
31
73
875
782
141
34
745
37
(222)
735
211
134
1,253
68
(149)
11,459
(73)
(8)
(12)
0
0
(93)
Mutual Funds
Investment Counselling
726
852
1,578
81
8
89
(19)
(43)
(62)
62
(35)
27
Hong Kong
India
156
1,006
0
0
1,162
0
69
69
14,199
1,033
Mutual Funds
Private Equity
Segregated Funds
Pooled Property Funds
Triple A
Total UK
Canada
Total Canada
International
*
Opening FUM
Total International
Total Investment Products
***
****
Net
Movement in
FUM
Closing FUM
30/09/2005
£m
1,517
2,668
1,477
4,952
381
3,498
12,976
116
148
264
178
113
291
904
965
1,869
0
69
17
135
17
204
0
69
152
221
173
1,210
1,383
(155)
878
1,151
2,029
16,228
Net Movement
in FUM
£m
Closing FUM
**
Total third party funds under management comprise the investment business noted above together with third party insurance contracts. New business relating to third party insurance contracts is
disclosed as insurance business for reporting purposes. An analysis of total third party funds under management is shown below.
Total Third Party Funds Under Management – Standard Life Investments
Gross Sales
Redemptions
Net Inflows
Market & other
movements
£m
£m
£m
£m
£m
Opening FUM
Investment Products
Third party insurance contracts (new business classified as
insurance products)
Third party funds under management
£m
14,199
1,033
(155)
878
1,151
2,029
16,228
8,109
22,308
381
1,414
(191)
(346)
190
1,068
729
1,880
919
2,948
9,028
25,256
*Other market movements include exchange rate movements, return of capital and adjustments for new money received internally from Group which is reported within non-third party FUM.
**Other movements in respect of Segregated Funds includes an adjustment of £400m for an understatement in earlier periods.
***Due to the nature of the Triple A fund the inflows shown are calculated using average net client balances. Other Movements are derived as the difference between these average net
inflows and the movement in the opening and closing FUM.
****As a result of the sales market volatility in India, Investment sales are shown as the net of sales less redemptions