Q3 Business Results

Standard Life plc 26 October 2007 Standard Life plc New Business Results - nine months to 30 September 2007 26 October 2007 â€¢ Worldwide life and pensions sales(1) up 21% to Â£11,669m (2006: Â£9,690m). â€¢ UK life and pensions sales up 27% to Â£9,850m (2006: Â£7,777m). - Individual SIPP* sales up 43% to Â£3,577m (2006: Â£2,506m). - Group Pensions sales up 31% to Â£2,000m (2006: Â£1,532m). â€¢ Standard Life Investments worldwide investment net inflows up 95% to Â£6,078m (2006: Â£3,121m). - Third party funds under management up 24% to Â£47.7bn (31 December 2006: Â£38.5bn). - Total funds under management up 8% to Â£142.2bn (31 December 2006: Â£132.1bn). â€¢ On track to meet our target of a 9 - 10% return on embedded value in 2007 and increasing thereafter. All comparisons are in sterling unless otherwise stated(2). All sales figures are on a PVNBP basis unless otherwise stated. All comparators are with the first nine months of 2006 unless otherwise stated. *Individual SIPP includes Insured SIPP & Drawdown and Non-Insured SIPP. Group Chief Executive Sandy Crombie said: 'Our performance has been strong this year. Worldwide life and pensions sales are up 21%, with strong growth in our UK and European operations despite more challenging conditions, particularly in the UK, during the third quarter. Standard Life Investments continues to make great progress and our investment net flows have increased substantially in spite of the recent volatility seen in global financial markets. The Group's success has been driven by industry-leading customer service, sustained investment outperformance and an innovative suite of products. These qualities will underpin our future growth and help deliver continuing strong performance.' Standard Life group The Group's new business performance in the first nine months of 2007 has been strong, with growth of 21% in worldwide life and pensions and a 95% increase in investment net inflows. The moderation in growth rate from that seen in recent quarters was due to lower levels of UK new business in the third quarter, reflecting the impact of seasonality, recent volatility in financial markets, competitor pricing activity, and a tougher 2006 Q3 comparator. We remain confident of achieving our previously announced margin targets and are on track to meet our target of a 9 - 10% return on embedded value in 2007 and increasing thereafter. UK Financial Services Our UK financial services division has enjoyed strong growth in the first nine months of 2007. Life and pensions new business volumes increased by 27% to Â£9,850m, driven by a 28% growth in pensions and a 23% increase in life sales. Gross mortgage lending and healthcare sales increased by 28% and 7% respectively. Individual SIPP sales increased by 43% to Â£3,577m (2006: Â£2,506m), resulting in SIPP funds under administration growing to Â£7.1bn(3) at the end of the third quarter (31 December 2006: Â£4.3bn). At 30 September 2007 we had 41,700 SIPP customers (31 December 2006: 25,200) with an average case size of Â£169,000. Our third quarter SIPP sales were lower than the second quarter, reflecting seasonality and the action by some competitors to increase commission rates on traditional pension products. We continue to invest in our SIPP proposition, with enhancements such as online servicing due to be launched in 2008. We believe our competitive advantages of superior customer service and the ability to invest in improving our proposition will enhance our market-leading status in the SIPP market. Standard Life's Wrap proposition continues to be rolled out and developed with IFAs. At 30 September 2007, funds under administration on the Wrap platform had increased to Â£0.8bn(3) (31 December 2006: Â£0.2bn). At the end of the third quarter there were 183 IFA firms using the platform (31 December 2006: 88 firms) and 5,900 customers (31 December 2006: 900 customers) with an average fund size of Â£138,000. We expect total funds under administration on the Wrap platform to exceed Â£1.0bn during the fourth quarter. Group Pensions sales increased by 31% to Â£2,000m (2006: Â£1,532m). Group SIPP accounted for 27% of total Group Pensions sales during the 9 month period (2006: 13%). As previously disclosed, Group Pension sales in the second quarter benefited from the rewrite of a group stakeholder scheme as a Group SIPP and significant DWP rebates. At 30 September 2007 UK corporate pension funds under management increased to Â£15.0bn (31 December 2006: Â£13.5bn). Trustee Investment Plan (TIP) and Personal Pension Investment Plan (PPIP) new business increased by 26% to Â£1,557m(4) (2006: Â£1,231m) driven by strong investment performance. Life sales increased by 23% to Â£1,656m (2006: Â£1,348m) partly due to a 13% increase in Investment Bond sales to Â£1,488m (2006: Â£1,322m). In addition, sales of our Offshore Bond, at Â£168m, were over six times the level reported in the prior year period (2006: Â£26m), helped by the launch of our retail portfolio bond and our distribution agreement with Fidelity. The impact of recent capital gains tax proposals may subdue sales of investment bonds while the new tax regime is clarified but should benefit mutual fund sales through FundZone. Annuity sales increased by 19% to Â£381m (2006: Â£320m). 94% of annuity sales came from customers with maturing Standard Life pensions (2006: 93%). 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 represented 41% of new business (2006: 28%) reflecting growth through Consulting Actuaries, multi-tie and single-tie distribution arrangements. Net flows for life and pensions business were Â£1.5bn during the first 9 months of 2007 (2006: Â£2.3bn)(5). Within this total, net pensions flows were Â£2.1bn (2006: Â£2.5bn). Excluding institutional TIP, underlying net pensions flows were Â£1.4bn (2006: Â£1.8bn). Net life outflows were Â£0.6bn during the period (2006: net outflow of Â£0.2bn). Gross mortgage lending increased by 28% to Â£2,697m (2006: Â£2,111m) with sales in the third quarter benefiting from the launch of new products and expected seasonal trends. At the end of the third quarter mortgages under management stood at Â£11.0bn (31 December 2006: Â£10.4bn). Our mortgage portfolio remains of the highest quality with an arrears rate of 0.17% at 30 September 2007, compared with an industry average at the end of the second quarter of 1.15%. Healthcare sales rose by 7% to Â£16m (2006: Â£15m) on an annual premium equivalent (APE) basis. Following the recent launch of our SME product we expect further progress in this market over the coming months. We have to date seen an increase in UK life and pensions sales during the month of October compared to September. However, against a backdrop of more volatile investment markets, increased cost of debt, lower expected returns from commercial property and new uncertainties in the tax regime affecting bond products, we expect slower market growth in the fourth quarter compared with the previous year. During this period, we expect to at least maintain our market leading position. Europe Life and pensions sales in Europe remained buoyant in the third quarter with sales for the first nine months increasing by 50% in constant currency to Â£771m (2006: Â£521m). In Germany sales were up by 30% on a constant currency basis to Â£417m (2006: Â£325m) due to the success of our new unit-linked product, Maxxellence and initiatives to strengthen distribution. In July, we introduced a basic variant of the Maxxellence product, which has broadened the reach of the offering. Sales in Ireland increased by 82% in constant currency to Â£354m (2006: Â£196m). This reflects the continued popularity of our new products, self investment options inspired by the UK SIPP platform, and our improved standing amongst financial advisers. As a consequence of current market volatility, we expect the short-term growth rate across our European operations to slow from the levels seen in recent quarters. Canada Our Canadian operations have returned to growth during the third quarter, following the planned realignment of our distribution capability, which reduced sales levels earlier this year. An 18% increase in third quarter sales in constant currency to Â£266m (2006: Â£228m), driven by strong growth in all product lines, demonstrates that this initiative is starting to deliver. Over the full nine month period, however, sales in our Canadian business were down 27% in constant currency to Â£855m (2006: Â£1,253m) reflecting our continuing focus on value over volume in a competitive market as well as a number of large transactions which boosted the prior year figure. Excluding these transactions, underlying sales volumes declined by 2% on a constant currency basis. Group Savings and Retirement sales during the nine month period decreased by 37% in constant currency to Â£481m (2006: Â£820m). However, the comparative period contains two large transactions, which accounted for Â£319m. Competition within the market remains aggressive and quote activity across all segments is slowing down. Nevertheless, sales increased by 13% during the third quarter. A number of large schemes, which have already been secured, should result in a further recovery when they are reflected in the fourth quarter sales. Individual Insurance, Savings & Retirement sales were down 19% in constant currency to Â£262m (2006: Â£348m). This reflects the continuing realignment of our sales operations and the inclusion in the prior year of unprofitable Universal Life sales, which the company no longer writes. Sales during the third quarter increased by 10% compared to the prior year. A further increase in sales levels is expected in Q4 as we continue to rebuild our sales capacity and increase our presence with wealth management distributors. Group Insurance sales were up 40% in constant currency to Â£112m (2006: Â£85m), reflecting our success in the health insurance segment and the repositioning of our strategy. We are making significant progress with our new disability consulting offering with a large client recently secured and expected to be reflected in the first quarter sales next year. The ongoing rebuilding of our retail sales force and confirmed sales in Group Savings and Retirement will provide the necessary momentum for a positive start to 2008. Asia Pacific Combined sales from our joint ventures in India and China and our Hong Kong operations have increased by 65% in constant currency. Standard Life's share of these sales was Â£193m (2006: Â£139m)(6). Sales from our Indian joint venture HDFC Standard Life Insurance Limited increased by 44% in constant currency. Standard Life's share of these sales was Â£147m (2006: Â£124m). The number of financial consultants appointed by the joint venture has increased to 99,300, an increase of 14,800 during the third quarter. Sales generated by our Chinese joint venture, Heng An Standard Life, more than doubled in constant currency, reflecting our continued expansion in major cities within existing provinces. Standard Life's share of these sales was Â£33m (2006: Â£15m). During the third quarter we further developed our presence within the Chinese market through the opening of a new branch in Liaoning province and launched unit-linked products for distribution through the employed salesforce and banks. We expect further strong growth in our Asia Pacific operations, driven by new product launches, wider distribution and market expansion. Standard Life Investments Standard Life Investments has continued to perform well despite volatility in global financial markets in the third quarter. Worldwide investment net inflows increased by 95% to Â£6,078m (2006: Â£3,121m). Strong sales of institutional and retail business led to UK net inflows increasing by 83% to Â£5,223m (2006: Â£2,849m). Retail mutual fund inflows increased by 52% to Â£1,401m (2006: Â£920m) despite a marked slowdown in gross inflows during the third quarter, which can be directly linked to the recent volatility in global financial markets. Inflows into Private Equity funds increased substantially by 174% to Â£460m (2006: Â£168m), principally due to a large mandate from CalPers(7) of â‚¬400m (Â£279m), which transitioned during the third quarter. Segregated fund inflows increased by 112% to Â£2,071m (2006: Â£978m) partly due two large bond mandates, which transitioned during the third quarter. We experienced a strengthening of net inflows in respect of our Canadian and International operations to Â£365m (2006: Â£72m) and Â£490m (2006: Â£200m) respectively, the trend in Canada reflecting a number of liability driven investment mandates won during the period. Total assets under management increased by 8% to Â£142.2bn at 30 September 2007 (31 December 2006: Â£132.1bn). This increase has been driven by third party assets under management, which have increased by 24% to Â£47.7bn (31 December 2006: Â£38.5bn) on the back of strong third party net inflows. Investment performance has held up well despite volatile market conditions, with 19 of our 23 mutual funds above median, and 4 of these in the top decile over a 12 month period. In addition, during the year to 31 August, 20 of our 23 pooled pension funds were above median, with 3 of these funds in the top decile. The outlook for Standard Life Investments remains positive with strong third party inflows, driven by institutional funds, expected to sustain continued growth in third party assets under management. For further information please contact: Institutional Equity Investors: Gordon Aitken 0131 245 6799 Duncan Heath 0131 245 4742 Retail Equity Investors: Computershare 0845 113 0045 Media: Barry Cameron 0131 245 6165 / 07712 486 463 Neil Bennett (Maitland) 020 7379 5151 / 07900 000 777 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 nine months to 30 September 2007 were Â£1: C$2.19 (2006: Â£1: C$2.05) and Â£1: â‚¬1.48 (2006: Â£1: â‚¬1.46). Funds under management are calculated using the closing exchange rate as at 30 September 2007. The principal closing exchange rates used as at 30 September 2007 were Â£1: C$2.02 (31 December 2006: Â£1: C$2.28) and Â£1: â‚¬1.43 (31 December 2006: Â£1: â‚¬1.48). 3. Analysis of Individual SIPP funds under administration. 30 Sept 31 Dec 2007 2006 Â£m Â£m Insured Standard Life Funds 2,716 1,923 Insured External Funds 1,590 921 Collectives - Standard 752 361 Life Investments Collectives - Funds Network 534 234 Cash 386 223 Non Cash and Non Collectives 1,090 599 Total 7,068 4,261 Insured 4,306 2,844 Non-insured 2,762 1,417 Total 7,068 4,261 Of the Â£7.1bn of SIPP funds under administration at 30 September 2007, Â£0.4bn relate to funds on the Wrap platform. 4. Investments (TIP & PPIP) sales comprised Institutional sales of Â£1,471m (2006: Â£1,139m) and Retail sales of Â£86m (2006: Â£92m). 5. Net flows for UK life and pensions products 9 9 Q3 Q3 months months 2007 2006 2007 2006 Pension Products Â£bn Â£bn Â£bn Â£bn Insured Pensions Premiums / Deposits 7.0 5.9 2.2 2.4 Claims (5.3) (3.4) (1.7) (1.6) Annuity Payments (0.7) (0.6) (0.3) (0.3) Insured Pension Net Flows 1.0 1.9 0.2 0.5 Non - Insured Pensions Premiums / Deposits 1.2 0.7 0.4 0.3 Claims (0.1) (0.1) (0.0) (0.1) Non-Insured Pension Net Flows 1.1 0.6 0.4 0.2 Total Pension Net Flows 2.1 2.5 0.6 0.7 Life Products Premiums / Deposits 2.1 2.0 0.6 0.7 Claims (2.7) (2.2) (0.9) (1.1) Total Life Net Flows (0.6) (0.2) (0.3) (0.4) UK L&P Net Flows Total UK L&P Insured-Product 0.4 1.7 (0.1) 0.1 Flows Total UK L&P Non-Insured 1.1 0.6 0.4 0.2 Product Flows Total UK L&P Net Flows 1.5 2.3 0.3 0.3 The figures reflected in the table above include the following amounts in respect of Institutional TIP: 9 9 Q3 Q3 months months 2007 2006 2007 2006 Â£bn Â£bn Â£bn Â£bn Premiums / Deposits 1.5 1.2 0.5 0.4 Claims (0.8) (0.5) (0.2) (0.2) Net Flows 0.7 0.7 0.3 0.2 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. California Public Employees Retirement System (CalPers). 8. The first nine months of 2006 sales figures span the demutualisation of The Standard Life Assurance Company on 10 July 2006. 9. Department of Work and Pensions rebate premiums were Â£231m (2006: Â£258m), comprising Individual Pensions rebates of Â£132m (2006: Â£153m) and Group Pensions rebates of Â£99m (2006: Â£105m). For a PDF version of the Press Release and the detailed financial tables, please click here. http://www.rns-pdf.londonstockexchange.com/rns/4215g_-2007-10-26.pdf Standard Life New Business Summary 9 month period ended 30 September 2007 Insurance PVNBP APE Operations 9 months 9 months % Change 9 months 9 months % to 30 to 30 to 30 to 30 Change September September (f) September September 2007 2006 2007 2006 (f) Â£m Â£m Â£m Â£m UK Pensions (a) 7,794 6,075 28% 1,036 838 24% Life 1,656 1,348 23% 166 136 22% Annuities 381 320 19% 38 32 19% Protection 19 34 (44%) 3 5 (40%) UK life and 9,850 7,777 27% 1,243 1,011 23% pensions Europe Ireland 354 196 81% 44 27 63% Germany 417 325 28% 39 31 26% Europe life and 771 521 48% 83 58 43% pensions Canada Group Savings 481 820 (41%) 42 72 (42%) and Retirement Individual 262 348 (25%) 26 38 (32%) Insurance, Savings and Retirement Group Insurance 112 85 32% 15 11 36% Canada life and 855 1,253 (32%) 83 121 (31%) pensions Asia Pacific India (c) 147 124 42% (b) 25 17 69% (b) China (c) 33 15 120% 5 2 150% Hong Kong 13 - - 2 - - Asia Pacific 193 139 62% (b) 32 19 88% (b) life and pensions Total worldwide 11,669 9,690 21% (b) 1,441 1,209 19% (b) life and pensions Investment Operations Gross Inflows Net Inflows 9 months 9 months 9 months 9 months to 30 to 30 to 30 to 30 September September September September 2007 2006 2007 2006 Â£m Â£m Â£m Â£m UK (d) 6,162 3,374 5,223 2,849 Canada 603 290 365 72 International(e) 577 390 490 200 Total worldwide investment 7,342 4,054 6,078 3,121 Banking Operations 9 months 9 months % to 30 to 30 Change September September (f) 2007 2006 Â£m Â£m Gross mortgage lending 2,697 2,111 28% SL Healthcare 9 months 9 months % to 30 to 30 Change September September (f) 2007 2006 Â£m Â£m APE 16 15 7% (a) UK Pensions figures include non-insurance element of SIPP product (9 months ended 30 September 2007 PVNBP Â£1,355m, APE Â£144m and 9 months ended 30 September 2006 PVNBP Â£854m, APE Â£90m). (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. Insurance Operations New Business 9 month period ended 30 September 2007 Single Premiums New Regular PVNBP APE Premiums 9 9 9 9 9 9 9 9 months months months months months months % % Change months months % % Change to to to to to to Change in to to Change in 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep (f) constant 30 Sep 30 Sep (f) constant 2007 2006 2007 2006 2007 2006 currency 2007 2006 currency Â£m Â£m Â£m Â£m Â£m Â£m (b)(f) Â£m Â£m (b)(f) UK Individual 531 616 30 45 660 806 (18%) (18%) 83 106 (22%) (22%) Pensions Insured SIPP & 2,001 1,455 42 36 2,222 1,652 35% 35% 242 182 33% 33% Drawdown Non-insured SIPP 1,277 787 17 11 1,355 854 59% 59% 144 90 60% 60% (a) Group Pensions 739 415 337 296 2,000 1,532 31% 31% 411 337 22% 22% Investments (TIP 1,557 1,231 - - 1,557 1,231 26% 26% 156 123 26% 26% and PPIP) Pensions 6,105 4,504 426 388 7,794 6,075 28% 28% 1,036 838 24% 24% Investment Bonds 1,488 1,323 - 1 1,488 1,322 13% 13% 149 133 12% 12% (c) Offshore Bond 168 26 - - 168 26 546% 546% 17 3 546% 546% Life 1,656 1,349 - 1 1,656 1,348 23% 23% 166 136 22% 22% Annuities 381 320 - - 381 320 19% 19% 38 32 19% 19% Protection - - 3 5 19 34 (44%) (44%) 3 5 (40%) (40%) UK life and 8,142 6,173 429 394 9,850 7,777 27% 27% 1,243 1,011 23% 23% pensions Europe Ireland 290 153 15 12 354 196 81% 82% 44 27 63% 63% Germany 40 24 35 28 417 325 28% 30% 39 31 26% 26% Europe life and 330 177 50 40 771 521 48% 50% 83 58 43% 43% pensions Canada Group Savings and 258 475 17 25 481 820 (41%) (37%) 42 72 (42%) (37%) Retirement Individual 237 316 2 6 262 348 (25%) (19%) 26 38 (32%) (26%) Insurance, Savings and Retirement Group Insurance - - 15 11 112 85 32% 40% 15 11 36% 36% Canada life and 495 791 34 42 855 1,253 (32%) (27%) 83 121 (31%) (27%) pensions Asia Pacific India (e) 4 5 24 17 147 124 42%(d) 44%(d) 25 17 69%(d) 72%(d) China (e) 24 10 2 1 33 15 120% 128% 5 2 150% 150% Hong Kong 6 - 1 - 13 - - - 2 - - - Asia Pacific life 34 15 27 18 193 139 62%(d) 65%(d) 32 19 88%(d) 93%(d) and pensions Total worldwide 9,001 7,156 540 494 11,669 9,690 21%(d) 22%(d) 1,441 1,209 19%(d) 20%(d) life and pensions (a) UK Pensions figures include non-insurance element of SIPP product. 2006 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) In the period for the 9 months to 30 September 2006 immaterial amounts were shown separately as Other. These have now been included in the Investment Bonds totals (SP Â£2m, RP Â£1m, PVNBP Â£3m and APE Â£1m). (d) 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 2006 and 2007. (e) Amounts shown reflect Standard Life's share of the Joint Venture Company's New Business except as noted in (d) above. (f) % change is calculated on the figures rounded to millions. Investment Operations 9 month period ended 30 September 2007 Opening Gross Redemptions Net Market & Net Closing FUM Inflows Inflows other movement FUM 01/01/2007 movements in FUM 30/09/2007 Â£m Â£m Â£m Â£m Â£m Â£m Â£m UK Mutual Funds (a) 4,772 2,011 (b) (610) 1,401 30 1,431 6,203 Private Equity 1,933 512 (52) 460 96 556 2,489 Segregated Funds 8,352 2,348 (c) (277) 2,071 94 2,165 10,517 Pooled Property Funds 600 54 (c) - 54 (18) 36 636 Triple A 5,020 1,237 (d) - 1,237 (41) 1,196 6,216 Total UK 20,677 6,162 (939) 5,223 161 5,384 26,061 Canada Mutual Funds 1,183 208 (e) (108) 100 222 322 1,505 Separate Mandates (f) 1,076 395 (130) 265 250 515 1,591 Total Canada 2,259 603 (238) 365 472 837 3,096 International Europe 24 18 (8) 10 41 51 75 Asia (excluding India) 103 106 (79) 27 67 94 197 India 1,706 453 (g) - 453 381 834 2,540 Total International 1,833 577 (87) 490 489 979 2,812 Total worldwide 24,769 7,342 (1,264) 6,078 1,122 7,200 31,969 investment products 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 & Net Closing FUM Inflows Inflows other movement FUM 01/01/2007 movements in FUM 30/09/2007 Â£m Â£m Â£m Â£m Â£m Â£m Â£m Third Party 24,769 7,342 (1,264) 6,078 1,122 7,200 31,969 Investment Products Third Party 13,749 2,186 (1,015) 1,171 820 1,991 15,740 Insurance Contracts (new business classified as insurance products) Total third party funds 38,518 9,528 (2,279) 7,249 1,942 9,191 47,709 under management Standard Life Investments - 132,078 142,245 total funds under management (a) Included within Mutual Funds are cash inflows which have also been reflected in Non-insured SIPP new business sales. (b) In the 9 months to 30 September 2006 UK Mutual Funds gross inflows were Â£1,211m and net inflows were Â£920m. (c) Institutional sales comprise Segregated and Pooled Property Fund sales. (d) 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. (e) In the 9 months to 30 September 2006 Canadian Mutual Funds gross inflows were Â£239m and net inflows were Â£127m. (f) Separate Mandates 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. (g) 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. Standard Life New Business Summary 3 month period ended 30 September 2007 Insurance Operations PVNBP APE 3 months 3 months % 3 months 3 months % to 30 to 30 Change to 30 to 30 Change September September (f) September September (f) 2007 2006 2007 2006 Â£m Â£m Â£m Â£m UK Pensions (a) 2,233 2,354 (5%) 299 302 (1%) Life 533 459 16% 54 46 16% Annuities 124 152 (18%) 12 16 (18%) Protection 6 10 (40%) 1 2 (50%) UK life and pensions 2,896 2,975 (3%) 366 366 - Europe Ireland 101 65 55% 12 9 33% Germany 157 116 35% 15 11 36% Europe life and 258 181 43% 27 20 35% pensions Canada Group Savings and 142 127 12% 13 11 18% Retirement Individual 90 84 7% 9 9 - Insurance, Savings and Retirement Group Insurance 34 17 100% 5 2 150% Canada life and 266 228 17% 27 22 23% pensions Asia Pacific India (c) 45 67 (9%) (b) 8 5 88% (b) China (c) 14 4 250% 3 1 200% Hong Kong 9 - - 1 - - Asia Pacific life 68 71 26% (b) 12 6 130% (b) and pensions Total worldwide life 3,488 3,455 1% (b) 432 414 4% (b) and pensions Investment Gross Inflows Net Inflows Operations 3 months 3 months 3 months 3 months to 30 to 30 to 30 to 30 September September September September 2007 2006 2007 2006 Â£m Â£m Â£m Â£m UK (d) 1,260 232 921 50 Canada 75 60 (27) (18) International (e) 219 (31) 163 (31) Total worldwide 1,554 261 1,057 1 investment Banking Operations 3 months 3 months % to 30 to 30 Change September September (f) 2007 2006 Â£m Â£m Gross mortgage lending 1,126 895 26% SL Healthcare 3 months 3 months % to 30 to 30 Change September September (f) 2007 2006 Â£m Â£m APE 5 5 - (a) UK Pensions figures include non-insurance element of SIPP product (3 months ended 30 September 2007 PVNBP Â£397m, APE Â£43m and 3 months ended 30 September 2006 PVNBP Â£382m, APE Â£39m). (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. Insurance Operations New Business 3 month period ended 30 September 2007 Single Premiums New Regular PVNBP APE Premiums 3 3 3 3 3 3 3 3 months months months months months months % % Change months months % % Change to to to to to to Change in to to Change in 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep (f) constant 30 Sep 30 Sep (f) constant 2007 2006 2007 2006 2007 2006 currency 2007 2006 currency Â£m Â£m Â£m Â£m Â£m Â£m (b)(f) Â£m Â£m (b)(f) UK Individual 134 200 10 12 180 253 (29%) (29%) 23 32 (28%) (28%) Pensions Insured SIPP & 572 664 11 10 624 718 (13%) (13%) 68 76 (11%) (11%) Drawdown Non-insured 370 348 7 4 397 382 4% 4% 43 39 10% 10% SIPP (a) Group Pensions 211 204 91 89 513 537 (4%) (4%) 113 109 4% 4% Investments (TIP 519 464 - - 519 464 12% 12% 52 46 12% 12% and PPIP) Pensions 1,806 1,880 119 115 2,233 2,354 (5%) (5%) 299 302 (1%) (1%) Investment Bonds 449 449 - - 449 448 - - 45 45 - - (c) Offshore Bond 84 11 - - 84 11 664% 664% 9 1 664% 664% Life 533 460 - - 533 459 16% 16% 54 46 16% 16% Annuities 124 152 - - 124 152 (18%) (18%) 12 16 (18%) (18%) Protection - - 1 2 6 10 (40%) (40%) 1 2 (50%) (50%) UK life and 2,463 2,492 120 117 2,896 2,975 (3%) (3%) 366 366 - - pensions Europe Ireland 87 50 3 4 101 65 55% 54% 12 9 33% 50% Germany 13 9 13 10 157 116 35% 34% 15 11 36% 50% Europe life and 100 59 16 14 258 181 43% 41% 27 20 35% 50% pensions Canada Group Savings 67 76 7 4 142 127 12% 13% 13 11 18% 18% and Retirement Individual 82 78 - 1 90 84 7% 10% 9 9 - 13% Insurance, Savings and Retirement Group Insurance - - 5 2 34 17 100% 88% 5 2 150% 150% Canada life and 149 154 12 7 266 228 17% 18% 27 22 23% 29% pensions Asia Pacific India (e) - 2 7 5 45 67 (9%)(d) (8%)(d) 8 5 88%(d) 93%(d) China (e) 11 4 1 - 14 4 250% 250% 3 1 200% 200% Hong Kong 5 - - - 9 - - - 1 - - - Asia Pacific 16 6 8 5 68 71 26%(d) 29%(d) 12 6 130%(d) 138%(d) life and pensions Total worldwide 2,728 2,711 156 143 3,488 3,455 1%(d) 1%(d) 432 414 4%(d) 5%(d) life and pensions (a) UK Pensions figures include non-insurance element of SIPP product. 2006 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) In the period for the 3 months to 30 September 2006 there were no amounts shown separately as Other. (d) 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 2006 and 2007. (e) Amounts shown reflect Standard Life's share of the Joint Venture Company's New Business except as noted in (d) above. (f) % change is calculated on the figures rounded to millions. Investment Operations 3 month period ended 30 September 2007 Opening Gross Redemptions Net Market & Net Closing FUM Inflows Inflows other movement FUM 01/01/2007 movements in FUM 30/09/2007 Â£m Â£m Â£m Â£m Â£m Â£m Â£m UK Mutual Funds (a) 6,072 511(b) (223) 288 (157) 131 6,203 Private Equity 2,133 290 (16) 274 82 356 2,489 Segregated Funds 10,082 610(c) (100) 510 (75) 435 10,517 Pooled Property Funds 660 11(c) - 11 (35) (24) 636 Triple A 6,614 (162)(d) - (162) (236) (398) 6,216 Total UK 25,561 1,260 (339) 921 (421) 500 26,061 Canada Mutual Funds 1,384 57(e) (26) 31 90 121 1,505 Separate Mandates (f) 1,577 18 (76) (58) 72 14 1,591 Total Canada 2,961 75 (102) (27) 162 135 3,096 International Europe 69 4 - 4 2 6 75 Asia (excluding India) 209 2 (56) (54) 42 (12) 197 India 2,175 213(g) - 213 152 365 2,540 Total International 2,453 219 (56) 163 196 359 2,812 Total worldwide 30,975 1,554 (497) 1,057 (63) 994 31,969 investment products 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 & Net Closing FUM Inflows Inflows other movement FUM 01/01/2007 movements in FUM 30/09/2007 Â£m Â£m Â£m Â£m Â£m Â£m Â£m Third Party Investment 30,975 1,554 (497) 1,057 (63) 994 31,969 Products Third Party Insurance 15,146 755 (205) 550 44 594 15,740 Contracts (new business classified as insurance products) Total third party 46,121 2,309 (702) 1,607 (19) 1,588 47,709 funds under management Standard Life Investments 140,567 142,245 - total funds under management (a) Included within Mutual Funds are cash inflows which have also been reflected in Non-insured SIPP new business sales. (b) In the 3 months to 30 September 2006 UK Mutual Funds gross inflows were Â£328m and net inflows were Â£236m. (c) Institutional sales comprise Segregated and Pooled Property Fund sales. (d) 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. (e) In the 3 months to 30 September 2006 Canadian Mutual Funds gross inflows were Â£52m and net inflows were Â£17m. (f) Separate Mandates 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. (g) 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. Insurance Operations New Business 15 month period ended 30 September 2007 Present Value of New Business Premiums (PVNBP) 3 months to 3 months to 3 months to 3 months to 3 months to 30 September 30 June 31 March 31 December 30 September 2007 2007 2007 2006 2006 Â£m Â£m Â£m Â£m Â£m UK Individual Pensions 180 300 180 145 253 Insured SIPP & Drawdown 624 812 786 781 718 Non-insured SIPP (a) 397 511 447 364 382 Group Pensions 513 905 582 457 537 Investments (TIP and PPIP) 519 505 533 1,197 464 Pensions 2,233 3,033 2,528 2,944 2,354 Investment Bonds (b) 449 505 534 540 448 Offshore Bond 84 60 24 13 11 Life 533 565 558 553 459 Annuities 124 129 128 118 152 Protection 6 7 6 8 10 UK life and pensions 2,896 3,734 3,220 3,623 2,975 Europe Ireland 101 125 128 134 65 Germany 157 139 121 211 116 Europe life and pensions 258 264 249 345 181 Canada Group Savings and Retirement 142 105 234 368 127 Individual Insurance, Savings and 90 82 90 112 84 Retirement Group Insurance 34 43 35 58 17 Canada life and pensions 266 230 359 538 228 Asia Pacific India (c) 45 24 78 56 67 China (c) 14 11 8 11 4 Hong Kong 9 3 1 - - Asia Pacific life and pensions 68 38 87 67 71 Total worldwide life and pensions 3,488 4,266 3,915 4,573 3,455 (a) UK Pensions figures include non-insurance element of SIPP product. 2006 figures have been re-stated to reflect inclusion of non-insurance element of SIPP. (b) In 2006 immaterial amounts were shown separately as Other. These have now been included in the Investment Bonds totals. (c) Amounts shown reflect Standard Life's share of the Joint Venture Company's New Business. This information is provided by RNS The company news service from the London Stock Exchange

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