Spotlight on new Standard Life chief David Nish

DAVID Nish will be forced to unveil a large drop in the value of Standard Life's UK life and pensions business this week, just days after being installed as the group's new chief executive.

Nish, who takes over from the long-serving Sir Sandy Crombie, will front the company's third- quarter figures amid investor concern about the weakness of the company's core business.

A consensus of analysts' forecasts predicts a 54 per cent fall in UK life and pensions business from £1.1 billion to £500 million in the first nine months of this year. Worldwide business is expected to be down by 39 per cent to £1.3bn.

The drop in value is a result of difficult market conditions and a lack of confidence among savers as the country struggles to get out of recession.

Also, Standard Life decided not to renew UK bulk investment bond deals written in 2008. As a result of that decision, investment bond business is believed to have plummeted.

The company is thought to have sold 20 per cent fewer life and pensions policies in the UK in the first nine months of 2009.

Finding someone to fill the role of head of UK life and pensions, which has been vacant since Trevor Matthews suddenly departed for Friends Provident nearly two years ago, is expected to be a priority for Nish. Sources said Crombie, a "Standard Lifer", found it relatively easy to combine both roles, but that Nish will want to pass on some responsibilities.

Despite Nish's limited experience of the insurance business, commentators see him as a safe pair of hands. One said: "His performance since joining has been impressive."

Analysts expect the group to beef up its Asian operations. Last month it announced that the Bank of China (BoC) will take majority ownership of Heng An Standard Life, which had been a 50-50 joint venture between BoC and Standard Life.

Experts said this move will allow Standard Life to take a "smaller stake in a bigger business", as domestic companies tend to grow faster than joint ventures in China.

Standard Life also wants to increase its joint venture operation in India. An analyst said: "I think, on a two-year view, they would look to IPO (instigate an initial public offering] part of the Indian operation, if nothing other than to create value."

Peter Eliot, an analyst with MF Global Securities, said he does not expect Nish to make sweeping changes but did not rule out him wanting to sell off certain assets. "There's been speculation that Standard Life Bank is up for sale." He added that Nish might want to sell some of its smaller international operations, such as those in Germany or Ireland.

Eliot said Standard Life is unlikely to be a takeover target and Nish may instead look at acquisitions to build up its UK business.

Fellow insurer, Prudential, will give a third quarter trading update on Wednesday. Broker Keefe, Bruyette & Woods expects UK figures to have dragged down worldwide sales by ten per cent year-on-year in the third quarter, which will be new chief executive Tidjane Thiam's first results announcement.

There have also been talks of Prudential reducing its presence in China's insurance market by selling part of its 50 per cent stake in Citic-Prudential.