DAVID Nish, the incoming chief executive of Standard Life, said yesterday that he was "encouraged but cautious" about market conditions, after the life and pensions group unveiled a 15 per cent slump in worldwide sales in the first nine months of the year.
The Edinburgh-based insurer, which sold its banking subsidiary to Barclays this week for £226 million, admitted it had been affected by falling equity values and by employers not buying more group pension products.
However, a lift in stock market
s and signs of economic recovery had shown through in the third quarter. "We are seeing business flows picking up," said Nish, who takes up the top post in January.
He said he would be working closely with retiring chief executive Sir Sandy Crombie and "picking his brains" as he considered a few issues.
Nish added that he had not yet made a decision on whether to appoint a chief executive to head the UK life and pensions business, a role undertaken by Crombie since the departure of Trevor Matthews to Friends Provident. However, he is expected to find someone to run the division.
Nish said the company would continue to evolve into a long-term investment savings business and dismissed suggestions that it was too narrowly focused, geographically or in its range of products.
ING analyst Kevin Ryan noted that Standard Life's nine-month new business sales were "slightly shy" of consensus forecasts and claimed that the firm was at a disadvantage for being UK-centric, especially during a downturn.
But Nish said: "If you look at the flow of sales, it is coming from outside the UK. We have an array of ways for people to invest their money."
Lower equity market levels cut the value of investments moved by customers from other pension schemes into Standard Life's self-invested personal pensions (Sipps).
For the first nine months of the year, worldwide sales were down 15 per cent to £10.5 billion, lower than the £10.63bn average expected by analysts.
However, the recent rebound in equity prices has boosted the value of its assets under management and net inflows.
At the fund management arm, Standard Life Investments, total assets under management leapt £15.3bn to £136.9bn during the third quarter, thanks to a record rise in third-party assets.
The group's capital buffer – a regulatory requirement for balance-sheet strength – rose again to £3.4bn.
Crombie said he was "particularly pleased" with the bounce back in assets under management. "This should benefit the group's profits and cashflow in the years to come," he said.
Crombie confirmed his end-of-year departure date last week, after naming finance director Nish as his successor.
The group is finalising the deal with Barclays to offload its banking arm.
Nish declined to elaborate on the closer working relationship that the two companies hoped to develop.
