DULL would appear to be the new black, or something like that.
Let's face it, life and pensions has never been the sexiest of businesses.
As a consumer, it's something that you sort out once, then generally forget about. As a business writer, well, it's fair to say that areas like global banking, retailing, even bean-counting, are more likely to get the creative juices flowing.
Sudd
enly, however, insurers have been grabbing headlines. Concerns about the sector's capital strength have had investors and financial hacks poring over updates and results statements from big-hitters such as Legal & General, Friends Prov and the Pru.
Today it was the turn of Scotland's biggest homegrown player, Standard Life.
Its top-line numbers certainly look impressive enough. A 2008 pre-tax operating profit of £933 million is 6 per cent up on the year before and comfortably ahead of City forecasts of close to £890m.
Crucially, the Edinburgh-based former mutual also reported a healthy capital surplus of £3.4 billion, little changed from £3.5bn at the end of December.
That capital buffer could fall to £2.9bn in the event of a 40 per cent drop in stock markets from their end-of-2008 levels, Standard noted.
Perhaps less palatable, are the group's net losses of £134m against profits of £587m a year earlier – highlighting only too graphically the impact of the stock market woes on Standard's bottom line.
The firm revealed in January that the financial crisis had taken its toll on sales at the end of last year.
UK life and pensions new business fell by a quarter to £2.38bn in the final three months of 2008. That year-end slump left full-year UK business down 9 per cent at £12.2bn.
Standard is stating the obvious when it notes that as an asset managing business, "our revenues will inevitably be impacted by lower financial market levels".
No surprise then to see Sir Sandy and Co wield the axe in an effort to counter the market malaise.
Last year, Standard delivered some £100m of planned cost savings a year earlier than its original 2009 target.
It is now aiming to slash another £75m from its cost base by the end of 2010. And there would appear to be few sacred cows.
Chief executive Crombie has warned that costs will be reduced right across the business.
On the flip side, the venerable Scots institution is investing in other areas, such as its so-called "wrap" investment portfolio management system, launched in 2006.
Notable is the tone of the language coming from Standard's top brass.
"We will continue to follow our proven conservative strategy," notes Crombie, while FD David Nish talks of taking a cautious stance and a "prudent" approach regarding dividend growth (shareholders will pocket a total 2008 dividend of 11.77p per share, up 2.3 per cent on a year earlier).
It's the sort of language that has suddenly become oh-so-fashionable in those chastened times.
