Better-than-Expected Sales Lift Standard Life’s Share Price in London

on Apr 24, 2013

British insurer Standard Life Plc (LON:SL) reported on 24 April that its long-term savings sales rose 24 percent on the year in the first-quarter boosted by regulatory changes which helped attract UK savers. The results beat analyst expectations and lifted Standard Life’s share price by almost four percent in early London trading.

**First-Quarter Sales Beat Estimates**
In a press release, the Edinburgh-based insurance company said that its long-term savings sales rose to £6.3 billion in the first quarter of 2013 from £5 billion in the corresponding quarter of 2012. The sales result surpassed the £5.36 billion average estimate of 15 analysts surveyed by the company.
“Standard Life has made a strong start to 2013, growing sales, net flows and assets,” CEO David Nish said in the press release.

Bloomberg quoted Eamonn Flanagan, analyst at Shore Capital Group Ltd (LON:SGR), as commenting that the sales result “was better than we and the market had expected in respect of funds under management,
new business and net flows”.
Long-term savings net flows increased 26 percent to £1.4 billion in the first quarter, as compared with £1.1 billion in the first quarter of 2012. Standard Life’s assets under administration rose 6.9 percent to £233.1 billion, up from £218.1 billion in the first quarter of 2012.

Standard Life’s share price rose 3.9 percent to 366.4p as of 8:11 GMT, the biggest gain in the FTSE 100 index.
**Regulatory Changes**
The company’s upbeat results are partly attributed to regulatory changes, which helped it attract UK savers. As Bloomberg noted, Standard Life is seeking UK pension assets as the government is forcing companies to offer pension plans in a bid to encourage savings and reduce reliance on the state for retirement. In addition, the company has been making acquisitions and investing in technology ahead of the Retail Distribution Review (RDR), a new regulation banning financial advisers from taking commissions from fund companies.

!m[Insurer Benefits from UK Regulatory Changes ](/uploads/story/1986/thumbs/pic1_inline.png)
Bloomberg quoted the company’s Chief Financial Officer Jackie Hunt as pointing out that its UK sales benefited from the implementation of auto-enrolment for a number of existing clients. Hunt added that “while the industry continues to see disruption as a result of the introduction of RDR, we are seeing encouraging signs”.

“We have made a smooth transition to operating under the new regulatory environment with encouraging early indicators from both our corporate and retail customers and their advisers,” Standard Life’s CEO noted in the company press release.
**Standard Life’s share price was eight percent up at 380.69p in London as of 13:05 GMT on 24 April 2013.**