New Business Results

Standard Life plc
08 May 2007

Standard Life plc
New Business Results - three months to 31 March 2007
8 May 2007


  • Worldwide life and pensions sales1 up 40% to £3,915m (2006: £2,802m).



  • UK life and pensions sales up 52% to £3,220m (2006: £2,119m).



    -  Individual SIPP* sales up 117% to £1,233m (2006: £569m).
    -  Group Pensions sales up 40% to £582m (2006: £415m).



  • Standard Life Investments third party funds under management up 10% to
    £42.4bn (31 December 2006: £38.5bn).

    -  UK Segregated Fund net inflows up 195% to £772m (2006: £262m).

    -  UK Mutual Fund retail net inflows up 76% to £587m (2006: £333m).



All comparisons are in sterling unless otherwise stated2. All sales figures are
on a PVNBP basis unless otherwise stated. All comparators are with the first
quarter of 2006 unless otherwise stated. * Individual SIPP includes Insured SIPP
& Drawdown and Non-insured SIPP.





Commenting on the results, Group Chief Executive Sandy Crombie said:



'I am delighted we have started 2007 so strongly following the excellent new
business performance throughout 2006.  The strong momentum in life and pensions
sales has continued in the first quarter of the year and our third party funds
under management have increased by 10%.



'Growth is being driven by strong sales of life and pensions business in the UK
with our strategy to focus on the accumulation of customers' assets.



'With our innovative range of products, excellent investment track record and
first class service, strong sales momentum is continuing into the second quarter
and is supporting the delivery of the 2007 return on embedded value target. We
continue to capitalise on the considerable opportunities available to our
businesses.'






UK



As previously announced we have established a UK division to drive the continued
growth of UK life and pensions, Standard Life Bank and Standard Life Healthcare.
The division will realise synergies in both costs and revenues, by streamlining
common functions, and will enhance our capability to grow.



Life and pensions new business volumes increased 52% in the UK to £3,220m (2006:
£2,119m) driven by 56% growth in pensions, 28% increase in life products, and a
strong showing in annuities.  Gross mortgage lending increased by 25% and
healthcare sales were consistent with the prior year.



Individual SIPP sales increased strongly by 117% to £1,233m (2006: £569m),
resulting in SIPP funds under management growing to £5.3bn3 (31 December 2006:
£4.3bn). While competitors have launched SIPPs, our superior offering and first
mover advantage have enabled us to continue to lead this market in both volume
and service. Customers have been taking advantage of the more generous annual
contribution limits post A-day and increasing their utilisation of the SIPP
functionality and investment flexibility with 35% of assets now invested in
non-insured funds.  With 30,800 accounts (31 December 2006: 25,200 accounts) we
see significant potential for the size of this market.



Standard Life's Wrap proposition continues to be rolled out to and developed
with IFAs, and this process will continue. At the end of the first quarter there
were 115 IFA firms using the platform and 2,500 customers with an average fund
size of £140,000.  At 31 March 2007, funds under management on the Wrap platform
had increased to £0.4bn3 (31 December 2006: £0.2bn).



Group Pensions performed well, increasing sales by 40% to £582m (2006: £415m)
due to higher increments from existing schemes and increasing volumes of Group
SIPP, which now accounts for 25% of Group Pensions sales. The strength in
service and award winning system functionality have contributed to Standard
Life's success in winning a number of new blue-chip Group SIPP schemes on a nil
commission basis. TIP and PPIP new business increased by 53% to £533m4 (2006:
£349m) driven principally by strong investment performance.



Life sales increased by 28% to £558m (2006: £438m).  Continued strong in-house
investment performance helped drive Investment Bond sales up 24% to £534m (2006:
£430m); 77% of Investment Bond assets were invested in Standard Life funds (31
December 2006: 77%).  The success of our Offshore Bond, which was launched in
January 2006, is encouraging, with sales increasing by 206% to £24m (2006: £8m).



Standard Life's annuity sales increased by 142% to £128m (2006: £53m) with 94%
of sales being generated from maturing Standard Life pensions.



In the UK life and pensions market we continue to strengthen our distribution by
diversifying into new channels while maintaining strong growth in the IFA
sector. Non-IFA sales now represent 38% (2006: 21%) of new business.



Net flows for life and pensions' products5 were £0.5bn in the first quarter of
2007 in line with our expectations (2006 full year: £3.2bn - included a £840m
bulk TIP mandate). Pensions' inflows were £0.7bn while there were outflows of
£0.2bn in life products.



Gross mortgage lending increased by 25% to £748m (2006: £596m) in a competitive
market due to continued successful targeting of core affluent customers.   At 31
March 2007 mortgages under management were £10.4bn (31 December 2006: £10.4bn).
Credit quality remains extremely high; the arrears rate of 0.19% continues to be
a fraction of the industry average of 0.94% as at 31 March 2007.



Healthcare sales of £5m are level year on year, with growth in Individual
business driven by sales in the senior market through the EspritHealth product.
Sales are lower in SME and Corporate business as we continue to focus on writing
profitable new business in a price driven market. A new SME proposition will be
launched this quarter which we expect to reduce operating costs and increase
sales. New propositions for Individual and Corporate business will follow later
this year.



Overall within the UK division we have been encouraged by the excellent start
made to 2007 and have witnessed a continuation of strong new business volumes
throughout April.



Europe



Life and pensions sales in Europe were strong, increasing by 53% in constant
currency to £249m (2006: £167m).



In Germany sales increased by 24% in constant currency to £121m (2006: £100m)
due to the success of the Maxxellence and Suxxess products. This is consistent
with our strategy to move away from With-Profits products with high guarantees
to Unit Linked and comparatively low guarantee products.



Strong sales growth has been experienced in Ireland, with new business
increasing by 96% in constant currency to £128m (2006: £67m).  The increase
reflects the establishment of new products and continuing strong pension sales.

Canada



Sales in our Canadian business were down 15% in constant currency to £359m
(2006: £479m).  As highlighted in the 2006 Q1 new business announcement the
comparator included an exceptionally large Group Annuity contract of £61m and
the carry over of unprofitable Universal Life sales of £17m from 2005.
Adjusting for these contracts, sales increased by 2% in constant currency and
within Group Savings and Retirement, sales of our flagship pensions products
increased 5% in constant currency.



Overall sales results for the quarter reflect the focus on margin over volume
and the continuation of the challenging conditions experienced in 2006. We
expect to make positive inroads in our chosen markets this year, with new
business prospects more encouraging now than three months ago.





Asia Pacific



Combined sales from our joint ventures in India and China and our Hong Kong
operations have increased by 184%6 in constant currency. Standard Life's share
of these sales was £87m (2006: £37m). This has been achieved by more than
doubling our licensed financial consultants in India to 74,000 (2006: 33,000),
and our agents in China to 1,800 (2006: 600). We seek continued sales growth in
each of these markets driven by wider distribution, market growth and new
product launches.





Standard Life Investments



Standard Life Investments delivered another excellent first quarter with
worldwide net investment sales of £2,264m (2006: £2,257m).  During the quarter
total funds under management increased by £4.9bn to £137.0bn.  The majority of
this increase came from third party funds under management which increased by
£3.9bn to £42.4bn at 31 March 2007.



Standard Life Investments UK net inflows reached £2,129m, up by 9% (2006:
£1,953m) with an improving mix of business.  This was driven by strong sales in
both institutional and retail business, with segregated fund inflows rising by
195% to £772m (2006: £262m) including notable bond mandate wins and retail
mutual fund inflows increasing 76% to £587m (2006: £333m). The increased sales
in these two product lines more than offset the decline in Triple A money market
fund sales which decreased by 42% to £705m (2006: £1,206m).



Performance remained strong with 18 out of 23 pooled pension funds beating the
median over the twelve months to 31 March 2007. During the first quarter of
2007, 14 out of 23 pooled pension funds produced top quartile performance with
seven of these funds top decile, and 14 out of 23 mutual funds produced top
quartile performance with 20 of the 23 above median.



Following the end of the quarter we continue to see a strong pipeline of
business building on Standard Life Investments' impressive performance track
record and product developments in both the retail and institutional markets.



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Ends







For further information please contact:



Media:
                                    
Scott White                          0131 245 5422 / 07712 485 738
Barry Cameron                        0131 245 6165 / 07712 486 463
Neil Bennett (Maitland)              0207 379 5151 / 07900 000 777



Equity Investors:

Gordon Aitken                        0131 245 6799
Conor O'Neill                        0131 245 6466



Debt Investors:

John Cummins                         0131 245 5195
Georgina Marshall                    0131 245 9798






Notes to Editors



1.      Present Value of New Business Premiums (PVNBP) is calculated as 100% of
single premiums plus the expected present value of new regular premiums.

2.      Insurance new business and Investment gross sales for overseas
operations are calculated using average exchange rates. The principal average
exchange rates for the first quarter 2007 were
£1: C$2.29 (2006: £1: C$2.01) and £1: €1.49 (2006: £1: €1.46). Funds under
management are calculated using the closing exchange rate as at 31 March 2007.
The principal closing exchange rates used as at 31 March 2007 were £1: C$2.26
(31 December 2006: £1: C$2.28) and £1: €1.47 (31 December 2006: £1: €1.48).



3.      Analysis of SIPP funds under management




                                                31 March     31 December 2006     30 June 2006          31 December
                                                    2007                                                       2005
                                                      £m                   £m               £m                   £m


Insured Standard Life Funds                        2,265                1,923            1,215                  762
Insured External Funds                             1,180                  921              435                  243
Collectives - Standard Life Investments              494                  361              226                  116
Collectives - Funds Network                          355                  234               70                   15
Cash                                                 262                  223              191                   83
Non Cash and Non Collectives                         729                  599              268                  121
Total                                              5,285                4,261            2,405                1,340

Insured                                            3,445                2,844            1,650                1,005
Non-insured                                        1,840                1,417              755                  335
Total                                              5,285                4,261            2,405                1,340





Of the £5.3bn of SIPP funds under management at 31 March 2007, some £0.2bn
relate to funds on the Wrap platform.



4.      Investments (TIP & PPIP) sales comprised Institutional sales of £509m
(2006: £318m) and Retail sales of £24m (2006: £31m).




5.      Net flows for UK life and pensions products
                                                   Q1 2007          FY 2006
Pension Products                                       £bn                £bn
Insured Pensions
Premiums / Deposits                                    2.3                8.8
Claims                                                (1.8)              (5.3)
Annuity Payments                                      (0.2)              (0.8)
Insured Pension Net Flows                              0.3                2.7

Non - Insured Pensions
Premiums / Deposits                                    0.4                1.0
Claims                                                  -                (0.1)
Non-Insured Pension Net Flows                          0.4                0.9

Total Pension Net Flows                                0.7                3.6

Life Products
Premiums / Deposits                                    0.7                2.7
Claims                                                (0.9)              (3.1)
Total Life Net Flows                                  (0.2)              (0.4)

UK L&P Net Flows
Total UK L&P Insured-Product Flows                     0.1                2.3
Total UK L&P Non-Insured Product  Flows                0.4                0.9
Total UK L&P Net Flows                                 0.5                3.2

The figures reflected in the table above include the following amounts in respect
of Institutional TIP:
                                                    Q1 2007         FY 2006
                                                       £bn                £bn
Premiums / Deposits                                    0.5                2.4
Claims                                                (0.2)              (0.7)
Net Flows                                              0.3                1.7



6.      The growth percentages quoted for India, Asia Pacific life and pensions
and Total worldwide life and pensions reflect the growth in sales in HDFC
Standard Life Insurance Limited, rather than the growth in Standard Life's share
of the joint venture. The sales quoted reflect Standard Life's share of the
joint venture.



7.      The full year 2006 sales figures span the demutualisation of The
Standard Life Assurance Company on 10 July 2006.



8.      Department of Work and Pensions (DWP) rebate premiums were £18m (2006:
£25m), comprising Individual Pensions rebates of £10m (2006: £14m) and Group
Pensions rebates of £8m (2006: £11m).



9.      There will be a conference call today for newswires at 8:00am hosted by
David Nish, Group Finance Director, Trevor Matthews, Chief Executive of Standard
Life Assurance Limited and Keith Skeoch, Chief Executive of Standard Life
Investments Limited. Dial in telephone number: [phone]. Callers
should quote Standard Life Sales.



10.   There will be a conference call for investors and analysts at 9:00am
hosted by David Nish, Group Finance Director, Trevor Matthews, Chief Executive
of Standard Life Assurance Limited and Keith Skeoch, Chief Executive of Standard
Life Investments Limited. Dial in telephone number [phone]. Callers
should quote Standard Life Sales. A recording of this call will be available for
replay for one week by dialling [phone], access code: 746594.



11.   Standard Life will host an analyst and investor day on 31 May 2007 at
Standard Life's Head Office in Edinburgh.






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            The company news service from the London Stock Exchange