SL's worldwide sales up 12% as chief quits

INSURANCE giant Standard Life today posted a 12 per cent rise in worldwide life and pensions sales over the last year.

But the Edinburgh-based former mutual suffered a hit from current market volatility with new UK sales slipping in the fourth quarter.

It warned that its UK operations could continue to be affected by volatile investment markets, a downturn in the commercial property sector and tax uncertainties hitting bond sales in the first quarter of the year.

Despite the uncertainty, it remained confident that it would improve its overall performance in the coming year.

The results come after the firm confirmed late last night that Trevor Matthews, its chief executive of UK financial services, had quit to become the new chief executive at rival Friends Provident.

Insiders say that he resigned from Standard because he had not been named successor to current chief executive Sandy Crombie.

Over the full year to December 31, Standard saw new business in UK life and pensions grow by 15 per cent to £13.17 billion. New business for the group totalled £16.31bn, up 12 per cent on 2006.

But UK life and pensions sales in the last three months of 2007 only reached £2.92bn, well below the £3.04bn expected in the market.

Sandy Crombie, Standard's chief executive, said: "The group's performance in 2007 was good, consolidating the strong progress made in previous years.

"We grew worldwide life and pensions sales by 12 per cent, and Standard Life Investments continues to deliver strong growth, despite challenging market conditions in the second half of the year."

He said that the release of preliminary results in March should show that all financial and efficiency targets for 2007 should be achieved. But Mr Crombie also gave a clear sign that he expects market conditions to lead to profits growth slowing throughout 2008. He said: "The early indications are that some of the markets in which we operate will remain difficult in 2008.

"We have however made a good start to 2008 and expect to improve our overall performance in the coming year."

Analysts and shareholders had hoped that the firm would use its latest new business results as an opportunity to give detail about the future direction of the company following its failed bid for Resolution and the exit of Mr Matthews.

But it made no mention about whether it would seek further acquisitions or continue its original strategy before the Resolution bid of trying to achieve organic growth.

The decision by Mr Matthews to join lesser rival Friends Provident came amid reports of tension between the current chief executive and the man who wanted to succeed him.

Following confirmation that he would lead Friends Provident, Mr Matthews, who earned more than £1.25 million in 2006, confirmed that he had hoped to succeed Mr Crombie. He said: "I was interested in the CEO position.

"It is not available at the moment, and this one is. This is a challenge, (but it is) a bird in the hand."

Bruno Paulsen, an insurance analyst with Sanford Bernstein, said: "I presume that if they had promised him the job within a certain time he would not have walked."