7th Feb 2007 07:01
Standard Life plc07 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 otherwisestated(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 of2005 unless otherwise stated. Group Chief Executive, Sandy Crombie, commented: "I am very pleased with the Group's sales performance in 2006 which has seenstrong growth in every quarter of the year. I believe our successfuldemutualisation has given Standard Life a platform on which to build continuedgrowth 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. Externalfactors such as A-day have clearly had a positive influence on our salesperformance. "Standard Life Investments has had another record year, with strong investmentperformance driving retail and institutional sales. "Standard Life has entered 2007 with a market-leading range of products and anexcellent investment track record. Our first class service and high qualityrelationships with distributors are synonymous with our brand. I have greatconfidence that we can capitalise on the attractive market and productopportunities 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 finalquarter of the year. Sales on a PVNBP basis, excluding non-insured SIPP, were £10,182m for the fullyear (2005: £6,455m). Excluding non-insured SIPP, UK Life and Pensions saleswere up 45% to £1,313m for the full year 2006 (2005: £908m) and up 77% to £392mfor the fourth quarter 2006 (2005 Q4: £221m). We have continued our focus on profitable areas of the market that offerfavourable margin opportunities. As a result single premiums, which represent65% of UK life and pensions APE sales, again outstripped growth rates of regularpremiums, increasing 89% and 14% respectively. The main drivers of thisperformance were our market leadership in SIPP, investment performance and theheightened activity in the pensions market as a result of A-day. Non-insured SIPP sales, which are included for the first time, were £129m in2006 (2005: £31m). These represented 33% of total SIPP & Drawdown sales. TotalSIPP(2) & Drawdown sales for 2006 increased 150% to £395m (2005: £158m). InsuredSIPP invests in insured linked funds while non-insured SIPP invests directly inmutual 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 SIPPproduct launches in 2006, Standard Life's superior offering and first moveradvantage have enabled it to continue to lead this market in both volume andservice. Our product continues to be attractive to high-net worth individuals,as evidenced by the average individual SIPP case size of £169,000 at theyear-end (30 September 2006: £163,000). 78% of single premium sales into SIPP inthe 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 successfullaunch 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 dueto customers preferring SIPP as we closed the Executive Pension Plan andIndividual Buy-out Plan to new business following A-Day. Sales declined 39% inthe 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 £8mAPE in the fourth quarter of 2005. In aggregate net life and pensions' funds flow was strongly positive during2006, although there remains continued uncertainty around long-term marketbehaviour. Lapses continue at levels in excess of long-term assumptions for lifewith profits and pensions. We continue to monitor the current level of lapsescarefully and are reviewing our long-term lapse assumptions, along with ourother long-term assumptions, in line with normal practice at this time of theyear. 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 thefourth quarter (2005 Q4: £39m). The availability of a further 57 External FundLinks in 2006 also drove sales and has helped contribute to volumes increasingin the fourth quarter. TIP and PPIP(6,10) sales increased 160% to £243m (2005: £93m) driven principallyby strong investment performance. These figures include one bulk TIP mandatefrom Citigroup, with Standard Life providing the investment platform for fourdefined contribution schemes. This contract resulted in £84m of APE sales in thefourth 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 bybusiness received from customers who had deferred retirement until after A-dayand Standard Life's demutualisation. Over 93% of annuity sales during 2006 camefrom customers with maturing Standard Life pensions. In UK Life and Pensions we anticipate the continuation of strong underlyingsales momentum into 2007, underpinned by our strong service and product offeringcoupled with our impressive track record in investment performance. European Life and Pensions Total European APE sales in 2006 were £97m (2005: £100m). A strong fourthquarter 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 resultedin an overspill of sales in the first quarter of 2005 after exceptional year endsales in 2004. The second, third and fourth quarters of 2006 have all seen salesbuilding in Germany, helped by the success of employee benefit and smoothedmanaged fund business. Sales in the final quarter were up 30% in constantcurrency 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 Germanyin 2007 are expected to grow as our improved product range is sold through awider 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 andthe introduction of new products based on the SIPP platform which has been sosuccessful in the UK. This momentum continued in the fourth quarter when salesrose 20% in constant currency to £19m (2005 Q4: £16m) assisted by the usualseasonal benefit of the tax year end. Sales growth in Ireland is expected tobuild momentum in 2007, driven by new product launches, enhancements to existingproducts and market growth. Canadian Life and Pensions In Canada, management's action to focus on building sustainable profitable newbusiness led to a decrease in sales of life and pensions products by 15% inconstant currency to £166m in 2006 (2005: £184m). This strategy is similar tothat adopted by our UK Life and Pensions business in 2004 and, combined with2005 having been a strong year, resulted in this sales decline. As we indicatedin our third quarter 2006 new business announcement, sales have recovered in thefourth quarter compared to the third quarter. Sales of Group Savings & Retirement products increased by 3% in constantcurrency to £98m for 2006 as two large cases secured in the second and fourthquarters of 2006 helped offset a weak market. Retention rates continue to bestrong in challenging markets. 2006 APE sales of Group Insurance fell in constant currency by 25%. The GroupInsurance market is highly sensitive to price and Standard Life's priority inthis market remains profitability rather than volume. Initiatives introduced inthe second half of the year have allowed quote activity for Group Insurance toimprove 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 2006is largely explained by the 71% decrease in Individual Insurance sales followingthe repricing of the Universal Life product in 2005 and the repositioning of ouroverall Individual Insurance offering. Within our retail offering, segregatedfunds were successful, growing 29% in 2006 in constant currency. Overall we expect market conditions to remain challenging in 2007. However, ourkey aim is to grow profitability which will be assisted by the product andbusiness developments we undertook in the second half of 2006. Asia Growth in Asia continues to build momentum with total APE sales of the Asianlife insurance businesses up 61%(11) in constant currency in 2006 compared to2005. Our share of total APE sales for 2006 was £29m (2005: £24m). Our life insurance business in India, HDFC Standard Life Insurance CompanyLimited, continues to develop rapidly. Sales increased 58%(11) in constantcurrency to £140m (2005: £92m) of which Standard Life's share was £25m. In China, Heng An Standard Life is making good progress with its expansionplans. Sales increased by 263% in constant currency to £7m (2005: £2m) of whichStandard Life's share was £4m. Individual business performed particularly wellin the last quarter of the year. Our branch expansion programme continues. InOctober, we opened a new branch office in Jiangsu province, the largestinsurance 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 Groupintends to transform its current insurance business into one that offerscomprehensive asset accumulation and wealth protection services to the Hong Kongmarket. In Asia we expect sales to continue to grow strongly as we capitalise on marketgrowth and triple our sales network in India by March 2008 and double our salesforce in China by the end of 2007. Standard Life Investments (SLI) Continued investment outperformance, which has driven further mandate wins torecord levels, together with improving equity markets have seen SLI's totalfunds under management increase from £118.8bn at the end of 2005 to £132.1bn atthe end of 2006. Third party funds under management increased from £29.1bn(3) atthe end of 2005 to £38.5bn at the end of 2006, an increase of over 32%. Totalproperty funds under management exceeded £13bn, assisted by the Select PropertyFund, 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 recordlevels of UK institutional business of £3.3bn, up 24% on 2005. SLI experienced its strongest ever year for UK mutual fund sales since it waslaunched 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 outperformedtheir respective peer groups during the twelve months to 31 December 2006. Therange of OEICs and Unit Trusts enjoyed another strong year; over 70% of the 23actively managed funds produced above average returns and 52% of them deliveredupper quartile performance. Eight out of the 23 OEIC funds obtained a top tenrank. The pipeline of new business remains strong. This along with Standard LifeInvestments' impressive performance track record and the successful introductionof additional products in both retail and institutional markets gives us theplatform 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 toSLB's continued focus on profitable growth and the competitiveness of the UKmortgage market. A significant number of mortgages reached the end of their incentive periodduring 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 31December 2006 (31 December 2005: £10.6bn). Credit quality remains extremelyhigh; the arrears rate of 0.17% at the year end continues to be a fraction ofthe 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 2007assisted by a strong pipeline of new business. Sales in the remainder of theyear are expected to benefit from enhanced offerings. Standard Life Healthcare (SLH) SLH's continued focus on writing profitable business in a competitive marketresulted in stable sales during 2006 of £20m (2005: £20m). In particular, levelsof new SME(12) business were lower as we concentrated on profitable segments ofthat market. However, this was compensated for by an increase in individualbusiness sales which grew by 27% to £7m (2005: £6m), partly due to thesuccessful launch of the EspritHealth product, which is aimed at the over 55sage group. The first phase of a new policy administration system, which is developed on thegroup IT platform, will commence this spring for SME business. The remainingproduct lines, including the business acquired from First Assist in April 2006,are expected to move fully onto the new system which is being developed during2007 and 2008. This new platform coupled with the launch of a new productproposition is expected to increase sales, improve efficiencies and reduceoperating costs in 2007, with the full benefits being realised in 2008 andthereafter. For further information please contact: Media: Scott White 0131 245 5422 / 07712 485 738Barry Cameron 0131 245 6165 / 07712 486 463Neil Bennett (Maitland) 0207 379 5151 / 07900 000 777 Equity Investors: Gordon Aitken 0131 245 6799Conor O'Neill 0131 245 6466Gillian Bailey 0131 245 1110 Debt Investors: John Cummins 0131 245 5195Georgina Marshall 0131 245 9798 Notes to Editors 1. Annual Premium Equivalent (APE) sales comprise new regular premiumsales 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 APEsales were £39m (2005 Q4: £11m). Non-insured SIPP sales on a PVNBP basis for2006 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 includedin overall APE sales and PVNBP to give a better indication of total SIPP-relatedactivity. New business for non-insured SIPP business is also included within ourInvestment Operations funds under management flows. 3. During the third quarter 2006 SLI reclassified £1.0bn of investmentsfrom Insurance funds under management to Third party funds under management.These investments represent individual segregated funds, which are similar totraditional mutual funds but backed by a 75% capital guarantee and are nowincluded within Third party insurance contracts. This reclassification has beenreflected in the "Market & other movements" column in the tables on pages 12 and15. The effect of restating Third party funds under management would be anincrease from £28.1bn to £29.1bn at 31 December 2005. Allowing for thisrestatement the growth in Third party funds under management in the 12 months to31 December 2006 was 32%. There has been no impact to Total funds undermanagement. 4. Net funds flow for UK life and pensions products 2006 2005Pension Products £bn £bnInsured PensionsPremiums / Deposits 8.8 5.7Claims (5.3) (2.6)Annuity Payments (0.8) (0.7)--------------------------------------------------Insured Pension Net Flows 2.7 2.4-------------------------------------------------- Non - Insured PensionsPremiums / Deposits 1.0 0.3Claims (0.1) 0.0--------------------------------------------------Non-Insured Pension Net 0.9 0.3Flows--------------------------------------------------Total Pension Net Flows 3.6 2.7-------------------------------------------------- Life ProductsPremiums / Deposits 2.7 2.0Claims (3.1) (2.4)--------------------------------------------------Total Life Net Flows (0.4) (0.4)-------------------------------------------------- UK L&P Net FlowsTotal UK L&P 2.3 2.0Insured-Product FlowsTotal UK L&P Non-Insured 0.9 0.3Product Flows--------------------------------------------------Total UK L&P Net Flows 3.2 2.3-------------------------------------------------- The figures reflected in the table above includethe following amounts in respect of InstitutionalTIP: 2006 2005 £bn £bnPremiums / Deposits 2.4 1.1Claims (0.7) (0.6)--------------------------------------------------Net Flows 1.7 0.5-------------------------------------------------- 5. All percentage changes shown for new business are calculated insterling. 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 calculatedusing the closing exchange rate as at period end. The principal closing exchangerates 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 Trusteesof exempt approved occupational pension schemes (defined benefit, definedcontribution and SSAS schemes). 7. Present Value of New Business Premiums (PVNBP) is calculated as 100% ofsingle 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 individualand group pensions (individual pensions: £17m, group pensions: £12m). In thefourth quarter of 2006 DWP rebate APE sales were £3m; £2m for individualpensions and £1m for group pensions. In the fourth quarter of 2005 DWP rebateAPE 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 TIPavailable to managers of Self Invested Personal Pensions (SIPP) that areadministered externally to Standard Life. 11. The growth percentages quoted for India and Asia relate to the results ofHDFC Standard Life Insurance Company Limited, rather than the growth in StandardLife'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 tablesincludes certain products which do not fall within the scope of "insurancecontracts" as defined by IFRS4 "Insurance Contracts" as they do not containsufficient insurance risk. 14. All 2006 sales figures span the demutualisation of The Standard LifeAssurance 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 bySandy Crombie, Group Chief Executive, David Nish, Group Finance Director, TrevorMatthews, 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 9:30amhosted by David Nish, Group Finance Director, Trevor Matthews, Chief Executiveof Standard Life Assurance Limited and Keith Skeoch, Chief Executive of StandardLife Investments. Dial in telephone number +44 (0)20 7162 0025. Callers shouldquote Standard Life Investor and Analyst Conference. A recording of this callwill be available for replay for one week by dialling 020 7031 4064, accesscode: 729702. Standard Life New Business Summary12 month period ended 31 December 2006-----------------------------------------------------------------------------------------------------------Insurance PVNBP APEOperations (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 2005UK £m £m £m £mPensions 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 andPensions 11,400 6,763 69% 1,442 939 54%-----------------------------------------------------------------------------------------------------------EuropeRepublic ofIreland 330 243 36% 46 34 35%Germany 536 677 (21%) 51 66 (23%)-----------------------------------------------------------------------------------------------------------EuropeanInsurance 866 920 (6%) 97 100 (3%)-----------------------------------------------------------------------------------------------------------CanadaGroup Savingsand Retirement 1,188 1,033 15% 98 89 10%IndividualInsurance,Savings andRetirement 460 565 (19%) 49 71 (31%)Group Insurance 143 284 (50%) 19 24 (21%)-----------------------------------------------------------------------------------------------------------CanadianInsurance 1,791 1,882 (5%) 166 184 (10%)-----------------------------------------------------------------------------------------------------------Asia PacificIndia (c) 180 94 170% (b) 25 23 52% (b)China (c) 26 7 271% 4 1 300%-----------------------------------------------------------------------------------------------------------Asia PacificInsurance 206 101 172% (b) 29 24 55% (b)-----------------------------------------------------------------------------------------------------------DiscontinuedOperations (d) 0 9 N/A 0 2 N/A-----------------------------------------------------------------------------------------------------------TotalWorldwideInsurance 14,263 9,675 47% 1,734 1,249 39%----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Investment Gross Inflows Net InflowsOperations ------------------ ------------------- 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 £mUK (e) 4,773 5,551 4,050 4,944Canada 369 399 104 (41)International (f) 615 (33) 424 (35)-----------------------------------------------------------------------------------------------------------TotalWorldwideInvestment 5,757 5,917 4,578 4,868----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Banking 12 12 months to 31 % ChangeOperations months December 2005 to 31 December 2006 £m £m-----------------------------------------------------------------------------------------------------------GrossMortgage 2,995 3,092 (3%)Lending-----------------------------------------------------------------------------------------------------------SL Healthcare 12 12 months to 31 % Change months December 2005 to 31 December 2006 £m £m-----------------------------------------------------------------------------------------------------------New BusinessSales 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 elementof 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 percentagemovement in the new business of HDFC Standard Life Insurance Limited as a wholeto avoid distortion due to changes in the Group's shareholding in the jointventure during 2005 and 2006. (c) Amounts shown reflect Standard Life's share of the Joint Venture Company'sNew Business except as noted in (b) above. (d) Spanish business is shown as discontinued operations as it was disposed ofin 2005. (e) The Triple A fund within UK Investment sales is calculated using average netclient balances. (f) International gross inflows include India where, due to the nature of theIndian 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 2005UK £m £m £m £m £m £mIndividualPensions 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-insuredSIPP 1,119 308 263% 17 0 N/A 129 31 316% 316%Group 538 428 26% 383 360 6% 437 403 8% 8%PensionsInvestments(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%InvestmentBonds 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/ABondOther 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 andPensions 9,311 4,929 89% 510 446 14% 1,442 939 54% 54%-------------------------------------------------------------------------------------------------------------------EuropeRepublic ofIreland 243 164 48% 22 17 29% 46 34 35% 35%Germany 42 36 17% 47 63 (25%) 51 66 (23%) (22%)-------------------------------------------------------------------------------------------------------------------EuropeanInsurance 285 200 43% 69 80 (14%) 97 100 (3%) (3%)-------------------------------------------------------------------------------------------------------------------CanadaGroupSavings and 607 498 22% 37 39 (5%) 98 89 10% 3%RetirementIndividualInsurance,Savings andRetirement 417 472 (12%) 7 24 (71%) 49 71 (31%) (35%)Group 0 4 N/A 19 24 (21%) 19 24 (21%) (25%)Insurance-------------------------------------------------------------------------------------------------------------------CanadianInsurance 1,024 974 5% 63 87 (28%) 166 184 (10%) (15%)-------------------------------------------------------------------------------------------------------------------Asia PacificIndia (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 PacificInsurance 22 13 78% (c) 26 22 54% (c) 29 24 55% (c) 61% (c)-------------------------------------------------------------------------------------------------------------------DiscontinuedOperations (e) 0 5 N/A 0 1 N/A 0 2 N/A N/A-------------------------------------------------------------------------------------------------------------------TotalWorldwideInsurance 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 elementof SIPP. (b) The percentage change in constant currency is calculated using constantrates of exchange. (c) The percentage change figures for India are computed based on the percentagemovement in the new business of HDFC Standard Life Insurance Company Limited asa whole to avoid distortion due to changes in the Group's shareholding in thejoint venture during 2005 and 2006. (d) Amounts shown reflect Standard Life's share of the Joint Venture Company'sNew Business except as noted in (c) above. (e) Spanish business is shown as discontinued operations as it was disposed ofin 2005.------------------------------------------------------------------------------------------------------------------------Investment Operations12 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 £mUK 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------------------------------------------------------------------------------------------------------------------------TotalInternational 1,341 615 (191) 424 68 492 1,833------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------TotalWorldwideInvestmentProducts 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 £mThird PartyInvestmentProducts 18,552 5,757 (1,179) 4,578 1,639 6,217 24,769Third PartyInsuranceContracts (newbusinessclassified asinsuranceproducts) (g) 9,577 3,238 (1,446) 1,792 2,380 4,172 13,749------------------------------------------------------------------------------------------------------------------------Total ThirdParty FundsUnderManagement (g) 28,129 8,995 (2,625) 6,370 4,019 10,389 38,518------------------------------------------------------------------------------------------------------------------------Standard LifeInvestments -Total FundsUnderManagement 118,842 132,078------------------------------------------------------------------------------------------------------------------------ (a) UK Mutual Funds gross inflows were £605m and net inflows were £293m in the12 months to 31 December 2005. Included within these figures are cash inflowswhich have also been reflected in non-insured SIPP new business sales withinInsurance 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 calculatedusing average net client balances. Other movements are derived as the differencebetween these average net inflows and the movement in the opening and closingFUM. (d) Canadian Mutual Funds gross inflows were £324m and net inflows were £246m inthe 12 months to 31 December 2005. (e) Separate Mandates (previously called "Investment Counselling") refers toinvestment funds products sold in Canada exclusively to institutional customers.These products contain no insurance risk and consist primarily of definedbenefit pension plan assets for which SLI exclusively provides portfolioadvisory services. (f) International gross inflows include India where, due to the nature of theIndian investment sales market, the new business is shown net. (g) During the third quarter 2006 SLI reclassified £1.0bn of investments fromInsurance Funds Under Management to Third Party Funds Under Management. Theseinvestments represent Individual Segregated Funds, which are similar totraditional Mutual Funds but backed by a 75% capital guarantee and are nowincluded within Third Party Insurance Contracts. This reclassification has beenreflected in the "Market & other movements" column (see Notes to Editors 3 forfurther details). Standard Life New Business Summary3 month period ended 31 December 2006----------------------------------------------------------------------------------------------------------Insurance PVNBP APEOperations (a) --------------- ------------------------------------------ 3 months to 3 months to 3 months to % Change 31 December 2006 31 December 31 December 2006 2005UK £m £m £mPensions 2,944 363 186 95%Life 553 55 40 38%Annuities 118 12 5 136%Protection 8 1 1 0%----------------------------------------------------------------------------------------------------------UK Life andPensions 3,623 431 232 86%----------------------------------------------------------------------------------------------------------EuropeRepublic ofIreland 134 19 16 19%Germany 211 20 16 25%----------------------------------------------------------------------------------------------------------EuropeanInsurance 345 39 32 22%----------------------------------------------------------------------------------------------------------CanadaGroup Savingsand Retirement 368 26 39 (33%)IndividualInsurance,Savings andRetirement 112 11 20 (45%)Group Insurance 58 8 6 33%----------------------------------------------------------------------------------------------------------CanadianInsurance 538 45 65 (31%)----------------------------------------------------------------------------------------------------------Asia PacificIndia (c) 56 8 6 56% (b)China (c) 11 2 1 100%----------------------------------------------------------------------------------------------------------Asia PacificInsurance 67 10 7 60% (b)----------------------------------------------------------------------------------------------------------DiscontinuedOperations (d) 0 0 0 N/A----------------------------------------------------------------------------------------------------------TotalWorldwideInsurance 4,573 525 336 56%---------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------Investment Gross Inflows Net InflowsOperations ---------------------- ------------------------ 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 £mUK (e) 1,399 1,719 1,201 1,429Canada 79 104 32 31International (f) 225 (111) 224 (113)----------------------------------------------------------------------------------------------------------TotalWorldwideInvestment 1,703 1,712 1,457 1,347---------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------Banking 3 months to 3 months to % ChangeOperations 31 December 31 December 2006 2005 £m £m----------------------------------------------------------------------------------------------------------Gross MortgageLending 884 802 10%---------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------SL Healthcare 3 months to 3 months to % Change 31 December 31 December 2006 2005 £m £m----------------------------------------------------------------------------------------------------------New BusinessSales 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 elementof 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 percentagemovement in the new business of HDFC Standard Life Insurance Limited as a wholeto avoid distortion due to changes in the Group's shareholding in the jointventure during 2005 and 2006. (c) Amounts shown reflect Standard Life's share of the Joint Venture Company'sNew Business except as noted in (b) above. (d) Spanish business is shown as discontinued operations as it was disposed ofin 2005. (e) The Triple A fund within UK Investment sales is calculated using average netclient balances. (f) International gross inflows include India where, due to the nature of theIndian 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 £mUKIndividualPensions 106 187 (43%) 9 14 (36%) 20 33 (39%) (39%)Insured SIPP& Drawdown 710 329 116% 13 6 117% 84 39 115% 115%Non-insuredSIPP 332 110 202% 6 0 N/A 39 11 255% 255%Group 123 145 (15%) 87 74 18% 100 88 14% 14%PensionsInvestments(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%InvestmentBonds 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/AOther 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 andPensions 3,138 1,363 130% 116 96 21% 431 232 86% 86%----------------------------------------------------------------------------------------------------------------------EuropeRepublic ofIreland 90 73 23% 10 9 11% 19 16 19% 20%Germany 18 9 100% 19 15 27% 20 16 25% 30%----------------------------------------------------------------------------------------------------------------------EuropeanInsurance 108 82 32% 29 24 21% 39 32 22% 25%----------------------------------------------------------------------------------------------------------------------CanadaGroup Savingsand Retirement 132 214 (38%) 12 17 (29%) 26 39 (33%) (35%)IndividualInsurance,Savings andRetirement 101 140 (28%) 1 6 (83%) 11 20 (45%) (43%)Group 0 1 N/A 8 6 33% 8 6 33% 24%Insurance----------------------------------------------------------------------------------------------------------------------CanadianInsurance 233 355 (34%) 21 29 (28%) 45 65 (31%) (31%)----------------------------------------------------------------------------------------------------------------------Asia PacificIndia (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 PacificInsurance 7 5 97% (c) 8 5 58% (c) 10 7 60% (c) 65% (c)----------------------------------------------------------------------------------------------------------------------DiscontinuedOperations (e) 0 0 N/A 0 0 N/A 0 0 N/A N/A----------------------------------------------------------------------------------------------------------------------TotalWorldwideInsurance 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 elementof SIPP. (b) The percentage change in constant currency is calculated using constantrates of exchange. (c) The percentage change figures for India are computed based on the percentagemovement in the new business of HDFC Standard Life Insurance Company Limited asa whole to avoid distortion due to changes in the Group's shareholding in thejoint venture during 2005 and 2006. (d) Amounts shown reflect Standard Life's share of the Joint Venture Company'sNew Business except as noted in (c) above. (e) Spanish business is shown as discontinued operations as it was disposed ofin 2005. Investment Operations3 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 £mUK 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----------------------------------------------------------------------------------------------------------------------TotalInternational 1,540 225 (1) 224 69 293 1,833--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------TotalWorldwideInvestmentProducts 22,668 1,703 (246) 1,457 644 2,101 24,769---------------------------------------------------------------------------------------------------------------------- Total Third Party Funds Under Management comprise the investment business notedabove together with third party insurance contracts. New Business relating tothird party insurance contracts is disclosed as insurance business for reportingpurposes. 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 £mThird PartyInvestmentProducts 22,668 1,703 (246) 1,457 644 2,101 24,769Third PartyInsuranceContracts (newbusinessclassified asinsuranceproducts) 12,067 1,499 (472) 1,027 655 1,682 13,749-----------------------------------------------------------------------------------------------------------------------Total ThirdParty FundsUnderManagement 34,735 3,202 (718) 2,484 1,299 3,783 38,518-----------------------------------------------------------------------------------------------------------------------Standard LifeInvestments -Total FundsUnderManagement 129,717 132,078----------------------------------------------------------------------------------------------------------------------- (a) UK Mutual Funds gross inflows were £227m and net inflows were £145m in the 3months to 31 December 2005. Included within these figures are cash inflows whichhave also been reflected in non-insured SIPP new business sales within InsuranceOperations. (b) Institutional sales comprise Segregated and Pooled Property Fund sales. (c) Due to the nature of the Triple A fund the inflows shown are calculatedusing average net client balances. Other movements are derived as the differencebetween these average net inflows and the movement in the opening and closingFUM. (d) Canadian Mutual Funds gross inflows were £96m and net inflows were £74m inthe 3 months to 31 December 2005. (e) Separate Mandates (previously called "Investment Counselling") refers toinvestment funds products sold in Canada exclusively to institutional customers.These products contain no insurance risk and consist primarily of definedbenefit pension plan assets for which SLI exclusively provides portfolioadvisory services. (f) International gross inflows include India where, due to the nature of theIndian 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 £mUKPensions (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 1,131Annuities 118 152 115 53 438 295Protection 8 10 13 11 42 42----------------------------------------------------------------------------------------------------------------------UK Life andPensions 3,623 2,975 2,683 2,119 11,400 6,763----------------------------------------------------------------------------------------------------------------------EuropeRepublic ofIreland 134 65 64 67 330 243Germany 211 116 109 100 536 677----------------------------------------------------------------------------------------------------------------------EuropeanInsurance 345 181 173 167 866 920----------------------------------------------------------------------------------------------------------------------CanadaGroupSavings and 368 127 420 273 1,188 1,033RetirementIndividualInsurance,Savings andRetirement 112 84 108 156 460 565Group 58 17 18 50 143 284Insurance----------------------------------------------------------------------------------------------------------------------CanadianInsurance 538 228 546 479 1,791 1,882----------------------------------------------------------------------------------------------------------------------Asia PacificIndia (c) 56 67 23 34 180 94China (c) 11 4 8 3 26 7----------------------------------------------------------------------------------------------------------------------Asia PacificInsurance 67 71 31 37 206 101----------------------------------------------------------------------------------------------------------------------DiscontinuedOperations (d) 0 0 0 0 0 9----------------------------------------------------------------------------------------------------------------------TotalWorldwideInsurance 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 elementof SIPP. (b) PVNBP for Pensions includes non insurance element of SIPP product notdisclosed 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'sNew Business. (d) Spanish business is shown as discontinued operations as it was disposed ofin 2005. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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