Upbeat Standard Life enjoys resilient quarter

published 25 April 2012

Life assurance leviathan Standard Life made a solid start to the year and is confident of achieving continued strong growth in assets.

Assets under administration (AUA) rose a bit more than the market had been expecting in the first quarter of 2012, standing at £206.8bn at the end of March, up from £198.4bn at the end of 2011, and ahead of market predictions of £204.5bn.

The group enjoyed net inflows of £1.1bn as gross inflows of £7.2bn in the first quarter outweighed redemptions of £6.1bn. This increase was driven by continuing net inflows into Standard Life's newer fee based propositions. The group drew attention to Standard Life Investments' strong start to the year with third party net inflows of £1.1bn representing an annualised 6% of opening assets under management (AUM).

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Standard Life Investments third party AUM of £76.1bn were up from the year-end figure of £71.8bn.

The group notched up long-term savings new business sales of £5.0bn, with the UK performing well, and although this failed to match the £5.8bn of sales in the first quarter of last year it was better than the £4.8bn the market had been expecting.

Long-term savings net inflows of £1.1bn (2011: £1.3bn) included strong flows into institutional pensions, driven by demand for the firm's Global Absolute Return Strategies proposition.

"Inflows into our long-term savings businesses and strong performance from Standard Life Investments have helped to increase both our group assets under administration and Standard Life Investments third party assets to record levels, driving growth in fee based revenue while we continue to improve the efficiency of our business," said David Nish, Standard Life's Chief Executive.

Looking ahead, the group is looking forward to significant regulatory change in the insurance industry.

"With the implementation of the Retail Distribution Review (RDR) just 251 days away, our retail business has scale and momentum and is ideally positioned to continue to drive asset growth through our leading platform propositions. This, together with the quality of our corporate pension offerings and forthcoming pensions reform, will provide us with an increased flow of new business over the medium to long term," the company statement said.

"We remain confident that we are well positioned to deliver continued strong growth in assets. We expect this, together with improvements in efficiency, to continue to drive an ongoing improvement in financial performance," Nish concluded.

The shares rose 4.3p to 228.3p in the first two hours of dealing following the release of the interim management statement.