New Business Results

Standard Life plc
07 August 2007


Standard Life plc

New Business Results - six months to 30 June 2007

7 August 2007



  • Worldwide life and pensions sales1 up 31% to £8,181m (2006: £6,235m).


  • Interim results will report an increased overall margin from full year
    2006.


  • UK life and pensions sales up 45% to £6,954m (2006: £4,802m).


          -  Individual SIPP* sales up 82% to £2,556m (2006: £1,406m).

          -  Group Pensions sales up 49% to £1,487m (2006: £995m).


  • Standard Life Investments worldwide investment net inflows up 61% to
    £5,021m (2006: £3,120m).



          -  Third party funds under management up 20% to £46.1bn (31 December 
             2006: £38.5bn).

          -  Total funds under management up 6% to £140.6bn from £132.1bn (31 
             December 2006).


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
half 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:



'Our strong new business performance is continuing.  UK life and pensions sales
have increased by 45%, building upon a strong comparative period in 2006, and
our third party funds under management continue to reach new highs.



'We have enjoyed great success with a range of asset accumulation products,
delivering higher sales at an increased overall margin.



'We are launching new products into our chosen markets, and this is being
supported by excellent investment performance and first-class service.  I am
confident this will enable Standard Life to grow new business further in the
future.'




Standard Life group



Standard Life has delivered strong new business results during the first half of
2007.  Worldwide life and pensions sales increased by 31% and Standard Life
Investments net inflows grew by 61%.



Our Interim results released on 4 September 2007 will report a significant
increase in PVNBP margin compared to the Pro forma Full Year 2006 figure of
1.4%, due to this strong sales growth and the continuing improvement in
efficiency.



UK Financial Services



Our UK financial services division has seen growth across all major product
categories in the first half of 2007.  Life and pensions new business volumes
increased by 45% to £6,954m, driven largely by continued growth in SIPP and
other pensions products.  Sales of pensions products increased by 49% and life
products by 26%.  Gross mortgage lending and healthcare sales increased by 29%
and 10% respectively.



Individual SIPP sales increased strongly by 82% to £2,556m (2006: £1,406m),
resulting in Individual SIPP funds under management growing to £6.3bn3 (31
December 2006: £4.3bn).  Sales have benefited from the increase in contribution
limits introduced at A-day and the implementation of new SIPP regulations.  At
30 June 2007 we had 36,800 SIPP customers (31 December 2006: 25,200) with an
average case size of £172,000.



Customers continue to take advantage of our SIPP functionality and investment
flexibility with sales of Non-insured SIPP doubling year-on-year compared to a
71% growth in Insured SIPP.  At 30 June 2007 37% of SIPP assets were invested in
non-insured funds (31 December 2006: 33%).



Standard Life's Wrap proposition continues to be rolled out and developed with
IFAs.  At the end of the second quarter there were 149 IFA firms using the
platform (31 December 2006: 88 IFA firms) and 4,300 customers (31 December 2006:
900 customers) with an average fund size of £140,000.  At 30 June 2007, funds
under administration on the Wrap platform had increased to £0.6bn (31 December
2006: £0.2bn).




We have experienced accelerated growth in Group Pensions, with sales increasing
by 49% to £1,487m (2006: £995m), largely due to increasing volumes of Group
SIPP.  Second quarter sales benefited from a large group stakeholder scheme
re-written as a Group SIPP4.  We expect this trend to continue and drive further
sales of Group SIPP, which now accounts for 31% of total Group Pensions sales.
We believe our excellent customer service and strong product proposition have
been major factors in our ability to retain and grow our Group Pensions
business.



Trustee Investment Plan (TIP) and Personal Pension Investment Plan (PPIP) sales
increased by 35% to £1,038m5 (2006: £767m), driven by strong investment
performance.



Life sales increased by 26% to £1,123m (2006: £889m), including a 19% increase
in Investment Bond sales to £1,039m (2006: £874m).  Sales of our Offshore Bond,
launched in January 2006, increased by 460% to £84m (2006: £15m), with the bulk
in the second quarter (£60m).  This reflects the increasing popularity of the
product as well as the introduction of wider investment options and bespoke
charging, which have enabled us to attract larger case sizes.



Standard Life's UK Annuity sales increased by 53% to £257m (2006: £168m).  This
rate of increase largely reflects lower sales levels in the first half of last
year due to A-day and Standard Life pensions policyholders deferring the
purchase of an annuity ahead of our demutualisation.



We continue to strengthen our distribution capability in the UK life and
pensions market by diversifying across channels whilst maintaining strong growth
in the traditional IFA sector.  Sales generated through channels other than
traditional IFAs now represent 40% (H1 2006: 26%) of new business.  This
increase principally reflects the growth in sales through Employee Benefit
Consultants and multi-tie and single-tie distribution arrangements.



Net flows for life and pensions business were positive at £1.2bn in the first
half of 20076.  Within this total, net pensions inflows were £1.5bn compared
with £1.8bn in H2 2006.  Excluding institutional TIP, underlying net pensions
inflows strengthened from £0.6bn in H2 2006 to £1.1bn in H1 2007.  Net life
outflows amounted to £0.3bn in H1 2007 compared to £0.6bn in H2 2006.  The
improving trend in underlying net flows has been achieved against a backdrop of
claims activity across our life and pensions portfolios being above expected
levels.




Gross mortgage lending increased by 29% to £1,571m (2006: £1,216m) resulting in
mortgages under management standing at £10.5bn as at 30 June 2007 (31 December
2006: £10.4bn).  We continue to maintain a balance between growth and margin,
and our mortgage portfolio remains of the highest quality with an arrears rate
of 0.18% at 30 June 2007, compared with an industry average of 0.94% at the end
of Q1 2007.



Healthcare sales increased by 10% to £11m on an annual premium equivalent (APE)
basis (2006: £10m).  We expect sales of SME business to grow in the second half
of the year following the launch in July of our new SME proposition.



Europe



Our European business experienced a strong first half with sales increasing to
£513m (2006: £340m), a 54% increase in constant currency.



In Germany we are evolving our product offering to match the significant changes
that have taken place in the market during recent years.  One such example is
our new unit-linked product, Maxxellence, which was launched in October 2006.
Its success, coupled with initiatives to access new distribution channels and
broaden existing broker arrangements, has helped us increase sales by 27% in
constant currency to £260m (2006: £209m).



Sales in Ireland increased by 96% in constant currency to £253m (2006: £131m).
This reflects the continued success of new products and the introduction of
self-investment options for customers, inspired by the UK SIPP platform.  The
positive impact of these developments has been underpinned by strong investment
performance.



Canada



Sales in our Canadian business were down 37% in constant currency to £589m
(2006: £1,025m).  This reflects a number of large transactions which boosted
sales volumes in the prior year, the continuation of our focus on margin over
volume in the first half, and a planned realignment of our distribution
capability.



Group Savings and Retirement sales declined by 46% in constant currency to £339m
(2006: £693m).  The comparative period includes two large transactions which
accounted for £319m. The second half of 2007 will be influenced by the results
of current proposals to a number of large institutional clients.



Individual Insurance, Savings and Retirement sales declined by 28% in constant
currency to £172m (2006: £264m).  This fall reflects the transition of life
focused distributors towards wealth management business, and the realignment of
sales staff following the initiation of our repositioning strategy at the end of
2005.  In addition, the comparative period included £17m of unprofitable
Universal Life sales which the company no longer writes.  We intend to re-launch
our individual retail proposition.



Group Insurance sales increased by 26% in constant currency to £78m (2006: £68m)
against the backdrop of a competitive market.  This growth reflects our success
in Life and Health insurance and the positive impact of our repositioning
strategy.



Excluding the business no longer written and the unusually large transactions in
the prior year period, underlying sales volumes declined by 7% on a constant
currency basis.



Asia Pacific



Combined sales from our joint ventures in India and China and our Hong Kong
operations have increased by 107% in constant currency.  Standard Life's share
of these sales was £125m (2006: £68m)7.



Sales from our Indian joint venture HDFC Standard Life Insurance Limited
increased by 104% in constant currency.  The number of financial consultants
appointed by the joint venture has increased to 84,500 (30 June 2006: 34,000).



Sales generated by our Chinese joint venture, Heng An Standard Life, increased
by 83% in constant currency, due to expansion in major cities within existing
provinces.  This strong growth has resulted in Heng An Standard Life moving into
a top 10 position among the foreign joint venture peer group in China.  We
expect to start writing business in Liaoning province later this year.




Standard Life Investments



Standard Life Investments continues to perform exceptionally well with worldwide
investment net inflows increasing by 61% to a record level of £5,021m (2006:
£3,120m).



Standard Life Investments UK net inflows increased by 54% to £4,302m (2006:
£2,799m) thanks to strong institutional and retail business.  Segregated fund
inflows increased by 60% to £1,561m (2006: £977m) and retail mutual fund inflows
increased by 63% to £1,113m (2006: £684m).  Inflows into the Triple A money
market fund increased by 53% to £1,399m (2006: £915m), reversing the decline
reported at the end of the first quarter.



We experienced a strengthening of net inflows in respect of our Canadian and
International operations to £392m (2006: £90m) and £372m (2006: £231m), the
trend in Canada reflecting a number of liability driven investment mandates won
during the period.



During the first half of 2007, total funds under management increased by £8.5bn
to £140.6bn (31 December 2006: £132.1bn).  The majority of this increase came
from third party funds under management which increased by £7.6bn to £46.1bn (31
December 2006: £38.5bn).



Performance remained strong during the six month period, with 18 of our 23
pooled pension funds above median and 6 of these in the top decile.   The
strength of performance across our range of mutual funds was recognised when
Standard life Investments was named 'Global Group of the Year' at the recent
Investment Week Awards 2007.




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)               020 7395 0452 / 07900 000777
Angus Maitland (Maitland)             020 7379 5151


Equity Investors:

Gordon Aitken                         0131 245 6799
Duncan Heath                          0131 245 4742


Debt Investors:

Andy Townsend                         0131 245 7260




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 gross sales for overseas operations are calculated
    using average exchange rates.  The principal average exchange rates for the
    first half of 2007 were £1: C$2.23 (2006: £1: C$2.03) and £1: €1.48 (2006:
    £1: €1.45).  Funds under management are calculated using the closing
    exchange rate as at 30 June 2007.  The principal closing exchange rates used
    as at 30 June 2007 were £1: C$2.13 (31 December 2006: £1 : C$2.28) and £1:
    €1.49 (31 December 2006: £1 : €1.48).



 3. Analysis of Individual SIPP funds under management




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

Insured Standard Life Funds                                  2,533                  2,265                        1,923
Insured External Funds                                       1,445                  1,180                          921
Collectives - Standard Life Investments                        632                    494                          361
Collectives - Funds Network                                    463                    355                          234
Cash                                                           334                    262                          223
Non Cash and Non Collectives                                   920                    729                          599
Total                                                        6,327                  5,285                        4,261

Insured                                                      3,978                  3,445                        2,844
Non-insured                                                  2,349                  1,840                        1,417
Total                                                        6,327                  5,285                        4,261



Of the £6.3bn of SIPP funds under management at 30 June 2007, some £0.2bn relate
to funds on the Wrap platform.



 4. The rewrite of the large Group Pensions case as a Group SIPP generated £140m
    of PVNBP in the second quarter.



 5. Investments (TIP & PPIP) sales in the first half of 2007 comprised
    Institutional sales of £982m (2006: £700m) and Retail sales of £56m (2006:
    £67m).

 6. Net flows for UK life and pensions products


                                                       H1 2007           H2 2006            H1 2006
Pension Products                                           £bn                £bn               £bn
Insured Pensions
Premiums / Deposits                                        4.8                5.3               3.5
Claims                                                    (3.6)              (3.5)             (1.8)
Annuity Payments                                          (0.4)              (0.5)             (0.3)
Insured Pension Net Flows                                  0.8                1.3               1.4

Non - Insured Pensions
Premiums / Deposits                                        0.8                0.6               0.4
Claims                                                    (0.1)              (0.1)               -
Non-Insured Pension Net Flows                              0.7                0.5               0.4

Total Pension Net Flows                                    1.5                1.8               1.8

Life Products
Premiums / Deposits                                        1.5                1.4               1.3
Claims                                                    (1.8)              (2.0)             (1.1)
Total Life Net Flows                                      (0.3)              (0.6)              0.2

UK L&P Net Flows
Total UK L&P Insured-Product Flows                         0.5                0.7               1.6
Total UK L&P Non-Insured Product  Flows                    0.7                0.5               0.4
Total UK L&P Net Flows                                     1.2                1.2               2.0

The figures reflected in the table above include the following amounts in respect of Institutional TIP:


                                                        H1 2007             H2 2006           H1 2006
                                                           £bn                £bn               £bn
Premiums / Deposits                                        1.0                1.6               0.8
Claims                                                    (0.6)              (0.4)             (0.3)
Net Flows                                                  0.4                1.2               0.5





 7. 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.



 8. H1 2006 sales figures relate to the period before the demutualisation of the
    Standard Life Assurance Company on 10 July 2006.



 9. Department of Work and Pensions rebate premiums in the first half of 2007
    were £165m (2006: £65m), comprising Individual Pensions rebates of £93m
    (2006: £37m) and Group Pensions rebates of £72m (2006: £28m).



10. There will be a conference call today for newswires and online publications
    at 8.00am hosted by David Nish, Group Finance Director, Trevor Matthews,
    Chief Executive of Standard Life UK Financial Services and Keith Skeoch,
    Chief Executive of Standard Life Investments.  Dial in telephone number +44
    (0)20 7162 0125.  Callers should quote Standard Life H1 Sales.



11. There will be a conference call today for investors and analysts at 9.30am
    hosted by David Nish, Group Finance Director, Trevor Matthews, Chief
    Executive of Standard Life UK Financial Services and Keith Skeoch, Chief
    Executive of Standard Life Investments.  Dial in telephone number +44 (0)20
    7162 0025.  Callers should quote Standard Life H1 Sales.  A recording of
    this call will be available for replay for one week by dialing +44 (0)20
    7031 4064 (access code 759198).







Standard Life New Business Summary
6 month period ended 30 June 2007

Insurance Operations                              PVNBP                                                 APE
                       6 months to   6 months to  % Change (f)           6 months to   6 months to  % Change (f)
                      30 June 2007  30 June 2006                        30 June 2007  30 June 2006
UK                              £m            £m                                  £m            £m
Pensions (a)                 5,561         3,721           49%                   737           534           38%
Life                         1,123           889           26%                   112            90           24%
Annuities                      257           168           53%                    26            16           63%
Protection                      13            24          -46%                     2             4          -50%
UK life and pensions         6,954         4,802           45%                   877           644           36%

Europe
Ireland                        253           131           93%                    32            18           78%
Germany                        260           209           24%                    24            21           14%
Europe life and pensions       513           340           51%                    56            39           44%

Canada
Group Savings and              339           693          -51%                    29            61          -52%
Retirement
Individual Insurance,          172           264          -35%                    17            29          -41%
Savings and Retirement
Group Insurance                 78            68           15%                    10             9           11%
Canada life and pensions       589         1,025          -43%                    56            99          -43%

Asia Pacific
India (c)                      102            57           95%     (b)            17            12           56% (b)
China (c)                       19            11           73%                     2             1          100%
Hong Kong                        4             -             -                     1             -             -
Asia Pacific life and          125            68           97%     (b)            20            13           57% (b)
pensions

Total worldwide life and     8,181         6,235           31%     (b)         1,009           795           27% (b)
pensions

Investment Operations                                 Gross Inflows                        Net Inflows
                                             6 months to   6 months to               6 months to   6 months to
                                            30 June 2007  30 June 2006              30 June 2007  30 June 2006
                                                      £m            £m                        £m            £m
UK (d)                                             4,902         3,142                     4,302         2,799
Canada                                               528           230                       392            90
International (e)                                    358           421                       327           231
Total worldwide investment                         5,788         3,793                     5,021         3,120

Banking Operations                                                               6 months to   6 months to  % Change (f)
                                                                                30 June 2007  30 June 2006
                                                                                          £m            £m
Gross mortgage lending                                                                 1,571         1,216           29%

SL Healthcare                                                                    6 months to   6 months to  % Change (f)
                                                                                30 June 2007  30 June 2006
                                                                                          £m            £m
APE                                                                                       11            10           10%


(a) UK Pensions figures include non-insurance element of SIPP product (6 months
ended 30 June 2007 PVNBP £958m, APE £101m and 6 months ended 30 June 2006 PVNBP
£472m, APE £50m).


(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 2006 and 2007.

(c) Amounts shown reflect Standard Life's share of the Joint Venture Company's
New Business except as noted in (b) above.

(d) The Triple A fund within UK Investment sales is calculated using average net
client balances.

(e) International gross inflows include India where, due to the nature of the
Indian investment sales market, the new business is shown as the net of sales
less redemptions.

(f) % change is calculated on the figures rounded to millions.





For the full Press Release including detailed financial tables, please click
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