New Business Results
Standard Life plc
07 February 2007
Standard Life plc
New business results - twelve months to 31 December 2006
7 February 2007
• Worldwide insurance sales on a PVNBP basis up 47% to £14,263m for full year
(2005: £9,675m). APE(1,2) sales up 39% to £1,734m (2005: £1,249m) for full
year, with a 56% increase in the fourth quarter of 2006.
• UK Life and Pensions sales on a PVNBP basis up 69% to £11,400m for full
year (2005: £6,763m). APE sales up 54% to £1,442m (2005: £939m) for full
year, with an 86% increase in the fourth quarter of 2006*.
- Self Invested Personal Pension (SIPP) and drawdown APE sales up 150%
to £395m (2005: £158m(2)), including non-insured SIPP sales of £129m
(2005: £31m).
- Investment bond APE sales up 66% to £185m (2005: £112m).
• SLI funds under management(3) up 11% to £132.1bn (31 December 2005:
£118.8bn). Third party funds under management(3) up 32% to £38.5bn (31
December 2005: £29.1bn).
• Net positive funds flow(4) for UK life and pension products was £3.2bn in
2006.
*Growth was 50% in the fourth quarter excluding a bulk TIP(6) mandate of £84m.
All comparisons above and in narrative below are in sterling unless otherwise
stated(5). All sales figures below are on an APE basis unless otherwise stated.
All comparators are with the twelve months or the comparable fourth quarter of
2005 unless otherwise stated.
Group Chief Executive, Sandy Crombie, commented:
'I am very pleased with the Group's sales performance in 2006 which has seen
strong growth in every quarter of the year. I believe our successful
demutualisation has given Standard Life a platform on which to build continued
growth in 2007 and beyond.
'We have seen particularly strong life and pensions sales in the UK in 2006,
driven by single premium business such as SIPPs and Investment Bonds. External
factors such as A-day have clearly had a positive influence on our sales
performance.
'Standard Life Investments has had another record year, with strong investment
performance driving retail and institutional sales.
'Standard Life has entered 2007 with a market-leading range of products and an
excellent investment track record. Our first class service and high quality
relationships with distributors are synonymous with our brand. I have great
confidence that we can capitalise on the attractive market and product
opportunities now open to us.'
UK Life and Pensions
Sales on a PVNBP(2,7) basis increased 69% to £11,400m for the full year,
compared with £6,763m in 2005. APE sales for 2006 increased by 54% to £1,442m
(2005: £939m), following an 86% increase to £431m (2005 Q4: £232m) in the final
quarter of the year.
Sales on a PVNBP basis, excluding non-insured SIPP, were £10,182m for the full
year (2005: £6,455m). Excluding non-insured SIPP, UK Life and Pensions sales
were up 45% to £1,313m for the full year 2006 (2005: £908m) and up 77% to £392m
for the fourth quarter 2006 (2005 Q4: £221m).
We have continued our focus on profitable areas of the market that offer
favourable margin opportunities. As a result single premiums, which represent
65% of UK life and pensions APE sales, again outstripped growth rates of regular
premiums, increasing 89% and 14% respectively. The main drivers of this
performance were our market leadership in SIPP, investment performance and the
heightened activity in the pensions market as a result of A-day.
Non-insured SIPP sales, which are included for the first time, were £129m in
2006 (2005: £31m). These represented 33% of total SIPP & Drawdown sales. Total
SIPP(2) & Drawdown sales for 2006 increased 150% to £395m (2005: £158m). Insured
SIPP invests in insured linked funds while non-insured SIPP invests directly in
mutual funds, commercial property and other assets.
SIPP assets under management, including both insured and non-insured SIPP,
increased £3.0bn to £4.3bn at 31 December 2006 from £1.3bn at 31 December 2005
(30 September 2006: £3.4bn). Although there have been several competitor SIPP
product launches in 2006, Standard Life's superior offering and first mover
advantage have enabled it to continue to lead this market in both volume and
service. Our product continues to be attractive to high-net worth individuals,
as evidenced by the average individual SIPP case size of £169,000 at the
year-end (30 September 2006: £163,000). 78% of single premium sales into SIPP in
the fourth quarter represented new inflows to the company.
Group Pensions' sales totalled £437m for 2006, an increase of 8% against 2005,
due to a greater level of increments from existing schemes and the successful
launch of our Group Flexible Retirement Plan and Group SIPP in January 2006.
Sales of Individual Pensions fell 7% to £126m in 2006 (2005: £135m) largely due
to customers preferring SIPP as we closed the Executive Pension Plan and
Individual Buy-out Plan to new business following A-Day. Sales declined 39% in
the fourth quarter in part due to the timing of Department of Work and Pensions
(DWP) rebates(8) which were £2m APE in the final quarter of 2006 compared to £8m
APE in the fourth quarter of 2005.
In aggregate net life and pensions' funds flow was strongly positive during
2006, although there remains continued uncertainty around long-term market
behaviour. Lapses continue at levels in excess of long-term assumptions for life
with profits and pensions. We continue to monitor the current level of lapses
carefully and are reviewing our long-term lapse assumptions, along with our
other long-term assumptions, in line with normal practice at this time of the
year. We will update on this with our 2006 preliminary results.
Strong investment performance has helped drive investment bond sales in 2006.
Sales rose 66% to £185m in 2006 (2005: £112m) and increased 37% to £53m in the
fourth quarter (2005 Q4: £39m). The availability of a further 57 External Fund
Links in 2006 also drove sales and has helped contribute to volumes increasing
in the fourth quarter.
TIP and PPIP(6,10) sales increased 160% to £243m (2005: £93m) driven principally
by strong investment performance. These figures include one bulk TIP mandate
from Citigroup, with Standard Life providing the investment platform for four
defined contribution schemes. This contract resulted in £84m of APE sales in the
fourth quarter 2006.
Annuity sales for 2006 were up 48% to £44m (2005: £30m) with an increase of 136%
to £12m (2005 Q4: £5m) in the fourth quarter of 2006. This was largely driven by
business received from customers who had deferred retirement until after A-day
and Standard Life's demutualisation. Over 93% of annuity sales during 2006 came
from customers with maturing Standard Life pensions.
In UK Life and Pensions we anticipate the continuation of strong underlying
sales momentum into 2007, underpinned by our strong service and product offering
coupled with our impressive track record in investment performance.
European Life and Pensions
Total European APE sales in 2006 were £97m (2005: £100m). A strong fourth
quarter in both Ireland and Germany drove sales up 25% in constant currency to
£39m (2005 Q4: £32m).
Standard Life Germany's APE sales for 2006 were down 22% in constant currency to
£51m (2005: £66m), due to changes to the domestic tax legislation which resulted
in an overspill of sales in the first quarter of 2005 after exceptional year end
sales in 2004. The second, third and fourth quarters of 2006 have all seen sales
building in Germany, helped by the success of employee benefit and smoothed
managed fund business. Sales in the final quarter were up 30% in constant
currency to £20m (2005 Q4: £16m). The launch of a new unit-linked product
(Maxxellence) in October has been well received by the market. Sales in Germany
in 2007 are expected to grow as our improved product range is sold through a
wider group of independent intermediaries.
Standard Life Ireland increased sales by 35% in constant currency to £46m (2005:
£34m), due to the success of the Synergy suite of products launched in 2005 and
the introduction of new products based on the SIPP platform which has been so
successful in the UK. This momentum continued in the fourth quarter when sales
rose 20% in constant currency to £19m (2005 Q4: £16m) assisted by the usual
seasonal benefit of the tax year end. Sales growth in Ireland is expected to
build momentum in 2007, driven by new product launches, enhancements to existing
products and market growth.
Canadian Life and Pensions
In Canada, management's action to focus on building sustainable profitable new
business led to a decrease in sales of life and pensions products by 15% in
constant currency to £166m in 2006 (2005: £184m). This strategy is similar to
that adopted by our UK Life and Pensions business in 2004 and, combined with
2005 having been a strong year, resulted in this sales decline. As we indicated
in our third quarter 2006 new business announcement, sales have recovered in the
fourth quarter compared to the third quarter.
Sales of Group Savings & Retirement products increased by 3% in constant
currency to £98m for 2006 as two large cases secured in the second and fourth
quarters of 2006 helped offset a weak market. Retention rates continue to be
strong in challenging markets.
2006 APE sales of Group Insurance fell in constant currency by 25%. The Group
Insurance market is highly sensitive to price and Standard Life's priority in
this market remains profitability rather than volume. Initiatives introduced in
the second half of the year have allowed quote activity for Group Insurance to
improve and sales rose to £8m in the final quarter of 2006 (2005 Q4: £6m).
The decline in Individual Insurance, Savings and Retirement sales of 35% in 2006
is largely explained by the 71% decrease in Individual Insurance sales following
the repricing of the Universal Life product in 2005 and the repositioning of our
overall Individual Insurance offering. Within our retail offering, segregated
funds were successful, growing 29% in 2006 in constant currency.
Overall we expect market conditions to remain challenging in 2007. However, our
key aim is to grow profitability which will be assisted by the product and
business developments we undertook in the second half of 2006.
Asia
Growth in Asia continues to build momentum with total APE sales of the Asian
life insurance businesses up 61%(11) in constant currency in 2006 compared to
2005. Our share of total APE sales for 2006 was £29m (2005: £24m).
Our life insurance business in India, HDFC Standard Life Insurance Company
Limited, continues to develop rapidly. Sales increased 58%(11) in constant
currency to £140m (2005: £92m) of which Standard Life's share was £25m.
In China, Heng An Standard Life is making good progress with its expansion
plans. Sales increased by 263% in constant currency to £7m (2005: £2m) of which
Standard Life's share was £4m. Individual business performed particularly well
in the last quarter of the year. Our branch expansion programme continues. In
October, we opened a new branch office in Jiangsu province, the largest
insurance market in mainland China. We expect to expand in two provinces,
Liaoning and Sichuan, and 6 new cities in 2007.
Standard Life relaunched its Hong Kong business on 16 January 2007. The Group
intends to transform its current insurance business into one that offers
comprehensive asset accumulation and wealth protection services to the Hong Kong
market.
In Asia we expect sales to continue to grow strongly as we capitalise on market
growth and triple our sales network in India by March 2008 and double our sales
force in China by the end of 2007.
Standard Life Investments (SLI)
Continued investment outperformance, which has driven further mandate wins to
record levels, together with improving equity markets have seen SLI's total
funds under management increase from £118.8bn at the end of 2005 to £132.1bn at
the end of 2006. Third party funds under management increased from £29.1bn(3) at
the end of 2005 to £38.5bn at the end of 2006, an increase of over 32%. Total
property funds under management exceeded £13bn, assisted by the Select Property
Fund, which was the fastest growing mutual fund in the UK in 2006.
Gross inflows rose to £9.0bn in 2006. Net inflows of £6.4bn, which equate to 22%
of third party funds under management at the start of year(3), included record
levels of UK institutional business of £3.3bn, up 24% on 2005.
SLI experienced its strongest ever year for UK mutual fund sales since it was
launched in 1998, with gross inflows of £1.7bn in 2006, up from £605m in 2005.
Net sales of £1.3bn were up 339% on 2005.
Investment performance has been strong, 87% of pooled pension funds outperformed
their respective peer groups during the twelve months to 31 December 2006. The
range of OEICs and Unit Trusts enjoyed another strong year; over 70% of the 23
actively managed funds produced above average returns and 52% of them delivered
upper quartile performance. Eight out of the 23 OEIC funds obtained a top ten
rank.
The pipeline of new business remains strong. This along with Standard Life
Investments' impressive performance track record and the successful introduction
of additional products in both retail and institutional markets gives us the
platform to deliver continued growth in 2007.
Standard Life Bank (SLB)
Gross mortgage lending fell 3% to £2,995m in 2006 from £3,092m in 2005 due to
SLB's continued focus on profitable growth and the competitiveness of the UK
mortgage market.
A significant number of mortgages reached the end of their incentive period
during 2006 reflecting high levels of lending in 2004 and redemptions rose to
£2,593m (2005: £2,076m). Mortgages under management fell to £10.4bn as at 31
December 2006 (31 December 2005: £10.6bn). Credit quality remains extremely
high; the arrears rate of 0.17% at the year end continues to be a fraction of
the industry average of 0.95% as at 31 December 2006.
Savings balances grew by £34m during 2006 to £4,155m (31 December 2005:
£4,119m). These balances were enhanced by growth in SIPP cash deposits to £246m
(31 December 2005: £82m).
Growth in gross lending is expected to improve in the first quarter 2007
assisted by a strong pipeline of new business. Sales in the remainder of the
year are expected to benefit from enhanced offerings.
Standard Life Healthcare (SLH)
SLH's continued focus on writing profitable business in a competitive market
resulted in stable sales during 2006 of £20m (2005: £20m). In particular, levels
of new SME(12) business were lower as we concentrated on profitable segments of
that market. However, this was compensated for by an increase in individual
business sales which grew by 27% to £7m (2005: £6m), partly due to the
successful launch of the EspritHealth product, which is aimed at the over 55s
age group.
The first phase of a new policy administration system, which is developed on the
group IT platform, will commence this spring for SME business. The remaining
product lines, including the business acquired from First Assist in April 2006,
are expected to move fully onto the new system which is being developed during
2007 and 2008. This new platform coupled with the launch of a new product
proposition is expected to increase sales, improve efficiencies and reduce
operating costs in 2007, with the full benefits being realised in 2008 and
thereafter.
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
Gillian Bailey 0131 245 1110
Debt Investors:
John Cummins 0131 245 5195
Georgina Marshall 0131 245 9798
Notes to Editors
1. Annual Premium Equivalent (APE) sales comprise new regular premium
sales plus 10% of single premiums.
2. UK L&P sales include, for the first time, non-insured SIPP APE sales of
£129m for 2006 (2005: £31m). For the fourth quarter 2006 non-insured SIPP APE
sales were £39m (2005 Q4: £11m). Non-insured SIPP sales on a PVNBP basis for
2006 were £1,218m (2005: £308m); PVNBP sales in the fourth quarter of 2006 were
£364m. APE sales and PVNBP associated with non-insured SIPP have been included
in overall APE sales and PVNBP to give a better indication of total SIPP-related
activity. New business for non-insured SIPP business is also included within our
Investment Operations funds under management flows.
3. During the third quarter 2006 SLI reclassified £1.0bn of investments
from Insurance funds under management to Third party funds under management.
These investments represent individual segregated funds, which are similar to
traditional mutual funds but backed by a 75% capital guarantee and are now
included within Third party insurance contracts. This reclassification has been
reflected in the 'Market & other movements' column in the tables on pages 12 and
15. The effect of restating Third party funds under management would be an
increase from £28.1bn to £29.1bn at 31 December 2005. Allowing for this
restatement the growth in Third party funds under management in the 12 months to
31 December 2006 was 32%. There has been no impact to Total funds under
management.
4. Net funds flow for UK life and pensions products
2006 2005
Pension Products £bn £bn
Insured Pensions
Premiums / Deposits 8.8 5.7
Claims (5.3) (2.6)
Annuity Payments (0.8) (0.7)
--------------------------------------------------
Insured Pension Net Flows 2.7 2.4
--------------------------------------------------
Non - Insured Pensions
Premiums / Deposits 1.0 0.3
Claims (0.1) 0.0
--------------------------------------------------
Non-Insured Pension Net 0.9 0.3
Flows
--------------------------------------------------
Total Pension Net Flows 3.6 2.7
--------------------------------------------------
Life Products
Premiums / Deposits 2.7 2.0
Claims (3.1) (2.4)
--------------------------------------------------
Total Life Net Flows (0.4) (0.4)
--------------------------------------------------
UK L&P Net Flows
Total UK L&P 2.3 2.0
Insured-Product Flows
Total UK L&P Non-Insured 0.9 0.3
Product Flows
--------------------------------------------------
Total UK L&P Net Flows 3.2 2.3
--------------------------------------------------
The figures reflected in the table above include
the following amounts in respect of Institutional
TIP:
2006 2005
£bn £bn
Premiums / Deposits 2.4 1.1
Claims (0.7) (0.6)
--------------------------------------------------
Net Flows 1.7 0.5
--------------------------------------------------
5. All percentage changes shown for new business are calculated in
sterling. The principal average exchange rates for 2006 are £1: C$2.09 (2005 £1:
C$2.20) and £1: €1.47 (2005 £1: €1.46). Funds under management are calculated
using the closing exchange rate as at period end. The principal closing exchange
rates used as at 31 December 2006 are £1: C$2.28 (31 December 2005 £1: C$2.01)
and £1: €1.48 (31 December 2005 £1: €1.46).
6. TIP is a Trustee Investment Plan designed to meet the needs of Trustees
of exempt approved occupational pension schemes (defined benefit, defined
contribution and SSAS schemes).
7. Present Value of New Business Premiums (PVNBP) is calculated as 100% of
single premiums plus the expected present value of new regular premiums.
8. Department of Work and Pensions (DWP) rebate premiums of £29m APE
(2005: £23m) were received in the year to 31 December 2006 for both individual
and group pensions (individual pensions: £17m, group pensions: £12m). In the
fourth quarter of 2006 DWP rebate APE sales were £3m; £2m for individual
pensions and £1m for group pensions. In the fourth quarter of 2005 DWP rebate
APE sales were £13m; £8m for individual pensions and £5m for group pensions.
9. Of the £266m APE sales of insured SIPP & Drawdown written in 2006,
£241m was insured SIPP and £25m was Drawdown.
10. PPIP is a Personal Pension Investment Plan. It is a version of TIP
available to managers of Self Invested Personal Pensions (SIPP) that are
administered externally to Standard Life.
11. The growth percentages quoted for India and Asia relate to the results of
HDFC Standard Life Insurance Company Limited, rather than the growth in Standard
Life's share of the joint venture's new business.
12. SME is defined as small and medium enterprises.
13. The insurance operations new business shown within the attached tables
includes certain products which do not fall within the scope of 'insurance
contracts' as defined by IFRS4 'Insurance Contracts' as they do not contain
sufficient insurance risk.
14. All 2006 sales figures span the demutualisation of The Standard Life
Assurance Company on 10 July 2006.
15. All financial information in this release is unaudited.
16. There will be a conference call today for newswires at 7:30am hosted by
Sandy Crombie, Group Chief Executive, David Nish, Group Finance Director, Trevor
Matthews, Chief Executive of Standard Life Assurance Limited and Keith Skeoch,
Chief Executive of Standard Life Investments. Dial in telephone number: +44 (0)
20 7162 0025. Callers should quote Standard Life Newswire Conference Call.
17. There will be a conference call for investors and analysts at 9:30am
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. Dial in telephone number +44 (0)20 7162 0025. Callers should
quote Standard Life Investor and Analyst Conference. A recording of this call
will be available for replay for one week by dialling 020 7031 4064, access
code: 729702.
Standard Life New Business Summary
12 month period ended 31 December 2006
-----------------------------------------------------------------------------------------------------------
Insurance PVNBP APE
Operations (a) -------------------------- ------------------------------
12 months 12 months % Change 12 months 12 months % Change
to 31 to 31 to 31 to 31
December December December December
2006 2005 2006 2005
UK £m £m £m £m
Pensions 9,019 5,295 70% 1,201 789 52%
Life 1,901 1,131 68% 191 114 68%
Annuities 438 295 48% 44 30 48%
Protection 42 42 0% 6 6 0%
-----------------------------------------------------------------------------------------------------------
UK Life and
Pensions 11,400 6,763 69% 1,442 939 54%
-----------------------------------------------------------------------------------------------------------
Europe
Republic of
Ireland 330 243 36% 46 34 35%
Germany 536 677 (21%) 51 66 (23%)
-----------------------------------------------------------------------------------------------------------
European
Insurance 866 920 (6%) 97 100 (3%)
-----------------------------------------------------------------------------------------------------------
Canada
Group Savings
and Retirement 1,188 1,033 15% 98 89 10%
Individual
Insurance,
Savings and
Retirement 460 565 (19%) 49 71 (31%)
Group Insurance 143 284 (50%) 19 24 (21%)
-----------------------------------------------------------------------------------------------------------
Canadian
Insurance 1,791 1,882 (5%) 166 184 (10%)
-----------------------------------------------------------------------------------------------------------
Asia Pacific
India (c) 180 94 170% (b) 25 23 52% (b)
China (c) 26 7 271% 4 1 300%
-----------------------------------------------------------------------------------------------------------
Asia Pacific
Insurance 206 101 172% (b) 29 24 55% (b)
-----------------------------------------------------------------------------------------------------------
Discontinued
Operations (d) 0 9 N/A 0 2 N/A
-----------------------------------------------------------------------------------------------------------
Total
Worldwide
Insurance 14,263 9,675 47% 1,734 1,249 39%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Investment Gross Inflows Net Inflows
Operations ------------------ -------------------
12 months 12 months to 12 months 12 months to
to 31 31 December to 31 31 December
December 2005 December 2005
2006 2006
£m £m £m £m
UK (e) 4,773 5,551 4,050 4,944
Canada 369 399 104 (41)
International (f) 615 (33) 424 (35)
-----------------------------------------------------------------------------------------------------------
Total
Worldwide
Investment 5,757 5,917 4,578 4,868
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Banking 12 12 months to 31 % Change
Operations months December 2005
to 31
December
2006
£m £m
-----------------------------------------------------------------------------------------------------------
Gross
Mortgage 2,995 3,092 (3%)
Lending
-----------------------------------------------------------------------------------------------------------
SL Healthcare 12 12 months to 31 % Change
months December 2005
to 31
December
2006
£m £m
-----------------------------------------------------------------------------------------------------------
New Business
Sales 20 20 0%
-----------------------------------------------------------------------------------------------------------
(a) Insurance Operations figures include non-insurance element of SIPP product.
2005 figures have been re-stated to reflect inclusion of non-insurance element
of SIPP. PVNBP 2006 - £1,218m PVNBP 2005 - £308m, APE 2006 - £129m, APE 2005 -
£31m.
(b) The percentage change figures for India are computed based on the percentage
movement in the new business of HDFC Standard Life Insurance Limited as a whole
to avoid distortion due to changes in the Group's shareholding in the joint
venture during 2005 and 2006.
(c) Amounts shown reflect Standard Life's share of the Joint Venture Company's
New Business except as noted in (b) above.
(d) Spanish business is shown as discontinued operations as it was disposed of
in 2005.
(e) The Triple A fund within UK Investment sales is calculated using average net
client balances.
(f) International gross inflows include India where, due to the nature of the
Indian investment sales market, the new business is shown net.
Insurance Operations New Business (a)
12 month period ended 31 December 2006
-------------------------------------------------------------------------------------------------------------------
Single Premiums New Regular Premiums Annual Premium Equivalents (APE)
-------------------------------------------------------------------------------------------------------------------
12 months 12 12 months 12 12 12 % Change % Change
to 31 Dec months % to 31 Dec months % months months in
2006 to 31 Change 2006 to 31 Change to 31 to constant
Dec 2005 Dec 2005 Dec 31 Dec currency (b)
2006 2005
UK £m £m £m £m £m £m
Individual
Pensions 722 734 (2%) 54 62 (13%) 126 135 (7%) (7%)
Insured SIPP
& Drawdown 2,165 1,109 95% 49 16 206% 266 127 109% 109%
Non-insured
SIPP 1,119 308 263% 17 0 N/A 129 31 316% 316%
Group 538 428 26% 383 360 6% 437 403 8% 8%
Pensions
Investments
(TIP and 2,428 934 160% 0 0 N/A 243 93 160% 160%
PPIP)
-------------------------------------------------------------------------------------------------------------------
Pensions 6,972 3,513 98% 503 438 15% 1,201 789 52% 52%
Investment
Bonds 1,850 1,117 66% 0 0 N/A 185 112 66% 66%
Offshore 39 0 N/A 0 0 N/A 4 0 N/A N/A
Bond
Other 12 4 200% 1 2 (50%) 2 2 0% 0%
-------------------------------------------------------------------------------------------------------------------
Life 1,901 1,121 70% 1 2 (50%) 191 114 68% 68%
Annuities 438 295 48% 0 0 N/A 44 30 48% 48%
Protection 0 0 N/A 6 6 0% 6 6 0% 0%
-------------------------------------------------------------------------------------------------------------------
UK Life and
Pensions 9,311 4,929 89% 510 446 14% 1,442 939 54% 54%
-------------------------------------------------------------------------------------------------------------------
Europe
Republic of
Ireland 243 164 48% 22 17 29% 46 34 35% 35%
Germany 42 36 17% 47 63 (25%) 51 66 (23%) (22%)
-------------------------------------------------------------------------------------------------------------------
European
Insurance 285 200 43% 69 80 (14%) 97 100 (3%) (3%)
-------------------------------------------------------------------------------------------------------------------
Canada
Group
Savings and 607 498 22% 37 39 (5%) 98 89 10% 3%
Retirement
Individual
Insurance,
Savings and
Retirement 417 472 (12%) 7 24 (71%) 49 71 (31%) (35%)
Group 0 4 N/A 19 24 (21%) 19 24 (21%) (25%)
Insurance
-------------------------------------------------------------------------------------------------------------------
Canadian
Insurance 1,024 974 5% 63 87 (28%) 166 184 (10%) (15%)
-------------------------------------------------------------------------------------------------------------------
Asia Pacific
India (d) 7 6 67% (c) 24 22 52% (c) 25 23 52% (c) 58% (c)
China (d) 15 7 114% 2 0 N/A 4 1 300% 263%
-------------------------------------------------------------------------------------------------------------------
Asia Pacific
Insurance 22 13 78% (c) 26 22 54% (c) 29 24 55% (c) 61% (c)
-------------------------------------------------------------------------------------------------------------------
Discontinued
Operations (e) 0 5 N/A 0 1 N/A 0 2 N/A N/A
-------------------------------------------------------------------------------------------------------------------
Total
Worldwide
Insurance 10,642 6,121 74% 668 636 5% 1,734 1,249 39% 38%
-------------------------------------------------------------------------------------------------------------------
(a) Insurance Operations figures include non-insurance element of SIPP product.
2005 figures have been re-stated to reflect inclusion of non-insurance element
of SIPP.
(b) The percentage change in constant currency is calculated using constant
rates of exchange.
(c) The percentage change figures for India are computed based on the percentage
movement in the new business of HDFC Standard Life Insurance Company Limited as
a whole to avoid distortion due to changes in the Group's shareholding in the
joint venture during 2005 and 2006.
(d) Amounts shown reflect Standard Life's share of the Joint Venture Company's
New Business except as noted in (c) above.
(e) Spanish business is shown as discontinued operations as it was disposed of
in 2005.
------------------------------------------------------------------------------------------------------------------------
Investment Operations
12 month period ended 31 December 2006
------------------------------------------------------------------------------------------------------------------------
Opening Gross Redemptions Net Market & other Net movement Closing FUM
FUM 1 Jan 2006 Inflows Inflows movements in FUM 31 Dec 2006
£m £m £m £m £m £m £m
UK Mutual 2,862 1,701 (a) (414) 1,287 623 1,910 4,772
Funds
Private 1,580 413 (59) 354 (1) 353 1,933
Equity
Segregated 5,915 1,667 (b) (250) 1,417 1,020 2,437 8,352
Funds
Pooled 438 85 (b) 0 85 77 162 600
Property
Funds
Triple A 4,421 907 (c) 0 907 (308) 599 5,020
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total UK 15,216 4,773 (723) 4,050 1,411 5,461 20,677
------------------------------------------------------------------------------------------------------------------------
Canada Mutual 1,019 293 (d) (144) 149 15 164 1,183
Funds
Separate 976 76 (121) (45) 145 100 1,076
Mandates (e)
------------------------------------------------------------------------------------------------------------------------
Total Canada 1,995 369 (265) 104 160 264 2,259
------------------------------------------------------------------------------------------------------------------------
International Europe 29 6 (6) 0 (5) (5) 24
Hong Kong 175 94 (185) (91) 19 (72) 103
India 1,137 515 (f) 0 515 54 569 1,706
------------------------------------------------------------------------------------------------------------------------
Total
International 1,341 615 (191) 424 68 492 1,833
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total
Worldwide
Investment
Products 18,552 5,757 (1,179) 4,578 1,639 6,217 24,769
------------------------------------------------------------------------------------------------------------------------
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 Gross Redemptions Net Market & other Net movement Closing FUM
FUM 1 Jan 2006 Inflows Inflows movements in FUM 31 Dec 2006
£m £m £m £m £m £m £m
Third Party
Investment
Products 18,552 5,757 (1,179) 4,578 1,639 6,217 24,769
Third Party
Insurance
Contracts (new
business
classified as
insurance
products) (g) 9,577 3,238 (1,446) 1,792 2,380 4,172 13,749
------------------------------------------------------------------------------------------------------------------------
Total Third
Party Funds
Under
Management (g) 28,129 8,995 (2,625) 6,370 4,019 10,389 38,518
------------------------------------------------------------------------------------------------------------------------
Standard Life
Investments -
Total Funds
Under
Management 118,842 132,078
------------------------------------------------------------------------------------------------------------------------
(a) UK Mutual Funds gross inflows were £605m and net inflows were £293m in the
12 months to 31 December 2005. Included within these figures are cash inflows
which have also been reflected in non-insured SIPP new business sales within
Insurance Operations.
(b) Institutional sales comprise Segregated and Pooled Property Fund sales.
(c) 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.
(d) Canadian Mutual Funds gross inflows were £324m and net inflows were £246m in
the 12 months to 31 December 2005.
(e) Separate Mandates (previously called 'Investment Counselling') refers to
investment funds products sold in Canada exclusively to institutional customers.
These products contain no insurance risk and consist primarily of defined
benefit pension plan assets for which SLI exclusively provides portfolio
advisory services.
(f) International gross inflows include India where, due to the nature of the
Indian investment sales market, the new business is shown net.
(g) During the third quarter 2006 SLI reclassified £1.0bn of investments from
Insurance Funds Under Management to Third Party Funds Under Management. These
investments represent Individual Segregated Funds, which are similar to
traditional Mutual Funds but backed by a 75% capital guarantee and are now
included within Third Party Insurance Contracts. This reclassification has been
reflected in the 'Market & other movements' column (see Notes to Editors 3 for
further details).
Standard Life New Business Summary
3 month period ended 31 December 2006
----------------------------------------------------------------------------------------------------------
Insurance PVNBP APE
Operations (a) --------------- ------------------------------------------
3 months to 3 months to 3 months to % Change
31 December 2006 31 December 31 December
2006 2005
UK £m £m £m
Pensions 2,944 363 186 95%
Life 553 55 40 38%
Annuities 118 12 5 136%
Protection 8 1 1 0%
----------------------------------------------------------------------------------------------------------
UK Life and
Pensions 3,623 431 232 86%
----------------------------------------------------------------------------------------------------------
Europe
Republic of
Ireland 134 19 16 19%
Germany 211 20 16 25%
----------------------------------------------------------------------------------------------------------
European
Insurance 345 39 32 22%
----------------------------------------------------------------------------------------------------------
Canada
Group Savings
and Retirement 368 26 39 (33%)
Individual
Insurance,
Savings and
Retirement 112 11 20 (45%)
Group Insurance 58 8 6 33%
----------------------------------------------------------------------------------------------------------
Canadian
Insurance 538 45 65 (31%)
----------------------------------------------------------------------------------------------------------
Asia Pacific
India (c) 56 8 6 56% (b)
China (c) 11 2 1 100%
----------------------------------------------------------------------------------------------------------
Asia Pacific
Insurance 67 10 7 60% (b)
----------------------------------------------------------------------------------------------------------
Discontinued
Operations (d) 0 0 0 N/A
----------------------------------------------------------------------------------------------------------
Total
Worldwide
Insurance 4,573 525 336 56%
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Investment Gross Inflows Net Inflows
Operations ---------------------- ------------------------
3 months to 3 months to 3 months to 3 months to
31 December 2006 31 December 31 December 31 December 2005
2005 2006
£m £m £m £m
UK (e) 1,399 1,719 1,201 1,429
Canada 79 104 32 31
International (f) 225 (111) 224 (113)
----------------------------------------------------------------------------------------------------------
Total
Worldwide
Investment 1,703 1,712 1,457 1,347
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
Banking 3 months to 3 months to % Change
Operations 31 December 31 December
2006 2005
£m £m
----------------------------------------------------------------------------------------------------------
Gross Mortgage
Lending 884 802 10%
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------
SL Healthcare 3 months to 3 months to % Change
31 December 31 December
2006 2005
£m £m
----------------------------------------------------------------------------------------------------------
New Business
Sales 5 5 0%
----------------------------------------------------------------------------------------------------------
(a) Insurance Operations figures include non-insurance element of SIPP product.
2005 figures have been re-stated to reflect inclusion of non-insurance element
of SIPP. PVNBP Q4 2006 - £364m, PVNBP full year 2005 - £308m, APE Q4 2006 -
£39m, APE Q4 2005 - £11m.
(b) The percentage change figures for India are computed based on the percentage
movement in the new business of HDFC Standard Life Insurance Limited as a whole
to avoid distortion due to changes in the Group's shareholding in the joint
venture during 2005 and 2006.
(c) Amounts shown reflect Standard Life's share of the Joint Venture Company's
New Business except as noted in (b) above.
(d) Spanish business is shown as discontinued operations as it was disposed of
in 2005.
(e) The Triple A fund within UK Investment sales is calculated using average net
client balances.
(f) International gross inflows include India where, due to the nature of the
Indian investment sales market, the new business is shown net.
----------------------------------------------------------------------------------------------------------------------
Insurance Operations New Business (a)
3 month period ended 31 December 2006
----------------------------------------------------------------------------------------------------------------------
Single Premiums New Regular Premiums Annual Premium Equivalents (APE)
------------------- ------------------ ---------------------------
3 3 % 3 3 % 3 3 months % %
months months Change months months Change months to Change Change
to 31 to to to to 31 31 Dec in
Dec 31 Dec 31 Dec 31 Dec Dec 2005 constant (b)
2006 2005 2006 2005 2006 currency
£m £m £m £m £m £m
UK
Individual
Pensions 106 187 (43%) 9 14 (36%) 20 33 (39%) (39%)
Insured SIPP
& Drawdown 710 329 116% 13 6 117% 84 39 115% 115%
Non-insured
SIPP 332 110 202% 6 0 N/A 39 11 255% 255%
Group 123 145 (15%) 87 74 18% 100 88 14% 14%
Pensions
Investments
(TIP and 1,197 153 682% 0 0 0% 120 15 682% 682%
PPIP)
----------------------------------------------------------------------------------------------------------------------
Pensions 2,468 924 167% 115 94 22% 363 186 95% 95%
Investment
Bonds 529 386 37% 0 0 N/A 53 39 37% 37%
Offshore Bond 13 0 N/A 0 0 N/A 1 0 N/A N/A
Other 10 3 233% 0 1 N/A 1 1 0% 0%
----------------------------------------------------------------------------------------------------------------------
Life 552 389 42% 0 1 N/A 55 40 38% 38%
Annuities 118 50 136% 0 0 N/A 12 5 136% 136%
Protection 0 0 N/A 1 1 0% 1 1 0% 0%
----------------------------------------------------------------------------------------------------------------------
UK Life and
Pensions 3,138 1,363 130% 116 96 21% 431 232 86% 86%
----------------------------------------------------------------------------------------------------------------------
Europe
Republic of
Ireland 90 73 23% 10 9 11% 19 16 19% 20%
Germany 18 9 100% 19 15 27% 20 16 25% 30%
----------------------------------------------------------------------------------------------------------------------
European
Insurance 108 82 32% 29 24 21% 39 32 22% 25%
----------------------------------------------------------------------------------------------------------------------
Canada
Group Savings
and Retirement 132 214 (38%) 12 17 (29%) 26 39 (33%) (35%)
Individual
Insurance,
Savings and
Retirement 101 140 (28%) 1 6 (83%) 11 20 (45%) (43%)
Group 0 1 N/A 8 6 33% 8 6 33% 24%
Insurance
----------------------------------------------------------------------------------------------------------------------
Canadian
Insurance 233 355 (34%) 21 29 (28%) 45 65 (31%) (31%)
----------------------------------------------------------------------------------------------------------------------
Asia Pacific
India (d) 2 1 145% (c) 7 5 54% (c) 8 6 56% (c) 62% (c)
China (d) 5 4 25% 1 0 N/A 2 1 100% 231%
----------------------------------------------------------------------------------------------------------------------
Asia Pacific
Insurance 7 5 97% (c) 8 5 58% (c) 10 7 60% (c) 65% (c)
----------------------------------------------------------------------------------------------------------------------
Discontinued
Operations (e) 0 0 N/A 0 0 N/A 0 0 N/A N/A
----------------------------------------------------------------------------------------------------------------------
Total
Worldwide
Insurance 3,486 1,805 93% 174 154 13% 525 336 56% 56%
----------------------------------------------------------------------------------------------------------------------
(a) Insurance Operations figures include non-insurance element of SIPP product.
2005 figures have been re-stated to reflect inclusion of non-insurance element
of SIPP.
(b) The percentage change in constant currency is calculated using constant
rates of exchange.
(c) The percentage change figures for India are computed based on the percentage
movement in the new business of HDFC Standard Life Insurance Company Limited as
a whole to avoid distortion due to changes in the Group's shareholding in the
joint venture during 2005 and 2006.
(d) Amounts shown reflect Standard Life's share of the Joint Venture Company's
New Business except as noted in (c) above.
(e) Spanish business is shown as discontinued operations as it was disposed of
in 2005.
Investment Operations
3 month period ended 31 December 2006
----------------------------------------------------------------------------------------------------------------------
Opening Gross Redemptions Net Market & other Net Closing
FUM Inflows Inflows movements movement FUM
1 Oct in FUM 31 Dec
2006 2006
£m £m £m £m £m £m £m
UK Mutual 4,004 490 (a) (123) 367 401 768 4,772
Funds
Private 1,753 207 (21) 186 (6) 180 1,933
Equity
Segregated 7,520 493 (b) (54) 439 393 832 8,352
Funds
Pooled 537 9 (b) 0 9 54 63 600
Property
Funds
Triple A 5,053 200 (c) 0 200 (233) (33) 5,020
----------------------------------------------------------------------------------------------------------------------
Total UK 18,867 1,399 (198) 1,201 609 1,810 20,677
----------------------------------------------------------------------------------------------------------------------
Canada Mutual 1,189 54 (d) (32) 22 (28) (6) 1,183
Funds
Separate 1,072 25 (15) 10 (6) 4 1,076
Mandates (e)
----------------------------------------------------------------------------------------------------------------------
Total Canada 2,261 79 (47) 32 (34) (2) 2,259
----------------------------------------------------------------------------------------------------------------------
International Europe 25 0 0 0 (1) (1) 24
Hong Kong 28 68 (1) 67 8 75 103
India 1,487 157 (f) 0 157 62 219 1,706
----------------------------------------------------------------------------------------------------------------------
Total
International 1,540 225 (1) 224 69 293 1,833
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Total
Worldwide
Investment
Products 22,668 1,703 (246) 1,457 644 2,101 24,769
----------------------------------------------------------------------------------------------------------------------
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 Gross Redemptions Net Market & other Net movement Closing FUM
1 Oct 2006 Inflows Inflows movements in FUM 31 Dec 2006
£m £m £m £m £m £m £m
Third Party
Investment
Products 22,668 1,703 (246) 1,457 644 2,101 24,769
Third Party
Insurance
Contracts (new
business
classified as
insurance
products) 12,067 1,499 (472) 1,027 655 1,682 13,749
-----------------------------------------------------------------------------------------------------------------------
Total Third
Party Funds
Under
Management 34,735 3,202 (718) 2,484 1,299 3,783 38,518
-----------------------------------------------------------------------------------------------------------------------
Standard Life
Investments -
Total Funds
Under
Management 129,717 132,078
-----------------------------------------------------------------------------------------------------------------------
(a) UK Mutual Funds gross inflows were £227m and net inflows were £145m in the 3
months to 31 December 2005. Included within these figures are cash inflows which
have also been reflected in non-insured SIPP new business sales within Insurance
Operations.
(b) Institutional sales comprise Segregated and Pooled Property Fund sales.
(c) 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.
(d) Canadian Mutual Funds gross inflows were £96m and net inflows were £74m in
the 3 months to 31 December 2005.
(e) Separate Mandates (previously called 'Investment Counselling') refers to
investment funds products sold in Canada exclusively to institutional customers.
These products contain no insurance risk and consist primarily of defined
benefit pension plan assets for which SLI exclusively provides portfolio
advisory services.
(f) International gross inflows include India where, due to the nature of the
Indian investment sales market, the new business is shown net.
Insurance Operations New Business (a)
12 month period ended 31 December 2006
----------------------------------------------------------------------------------------------------------------------
Present Value of New Business Premiums (PVNBP)
-------------------------------------------------------------
3 months 3 months 3 months 3 months 12 months 12 months
ended 31 ended 30 ended 30 ended 31 ended 31 ended 31
December September June March December December
2006 2006 2006 2006 2006 2005
£m £m £m £m £m £m
UK
Pensions (b) 2,944 (b) 2,354 (b) 2,104 (b) 1,617 (b) 9,019 (b) 5,295 (b)
Life 553 459 451 438 1,901 1,131
Annuities 118 152 115 53 438 295
Protection 8 10 13 11 42 42
----------------------------------------------------------------------------------------------------------------------
UK Life and
Pensions 3,623 2,975 2,683 2,119 11,400 6,763
----------------------------------------------------------------------------------------------------------------------
Europe
Republic of
Ireland 134 65 64 67 330 243
Germany 211 116 109 100 536 677
----------------------------------------------------------------------------------------------------------------------
European
Insurance 345 181 173 167 866 920
----------------------------------------------------------------------------------------------------------------------
Canada
Group
Savings and 368 127 420 273 1,188 1,033
Retirement
Individual
Insurance,
Savings and
Retirement 112 84 108 156 460 565
Group 58 17 18 50 143 284
Insurance
----------------------------------------------------------------------------------------------------------------------
Canadian
Insurance 538 228 546 479 1,791 1,882
----------------------------------------------------------------------------------------------------------------------
Asia Pacific
India (c) 56 67 23 34 180 94
China (c) 11 4 8 3 26 7
----------------------------------------------------------------------------------------------------------------------
Asia Pacific
Insurance 67 71 31 37 206 101
----------------------------------------------------------------------------------------------------------------------
Discontinued
Operations (d) 0 0 0 0 0 9
----------------------------------------------------------------------------------------------------------------------
Total
Worldwide
Insurance 4,573 3,455 3,433 2,802 14,263 9,675
----------------------------------------------------------------------------------------------------------------------
(a) Insurance Operations figures include non-insurance element of SIPP product.
2005 figures have been re-stated to reflect inclusion of non-insurance element
of SIPP.
(b) PVNBP for Pensions includes non insurance element of SIPP product not
disclosed previously - £364m (Q4 2006), £382m (Q3 2006), £308m (Q2 2006), £164m
(Q1 2006), and £308m for full year 2005.
(c) Amounts shown reflect Standard Life's share of the Joint Venture Company's
New Business.
(d) Spanish business is shown as discontinued operations as it was disposed of
in 2005.
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