Standard Life sees business sales fall

INSURER Standard Life saw a fall in new business sales in the past 12 months due to stock market volatility.

Standard Life said its sales had been hit in Ireland and abroad by the fall in equity markets, but said the sale of Personal Retirement Savings Accounts (PRSAs) had been encouraging.

The mutual insurer said single premium sales were down 29% in the year to November 15 to €259 million with annual premium sales down 12% to €34m.

“The pensions market experienced some uncertainty earlier in the year,” Standard Life Ireland chief executive Rory O’Riordan said.

He added the insurer was making an aggressive move into the PRSA market.

“In entering the PRSA market, Standard Life launched a non-standard PRSA and took a very consumer leading approach, offering a product that provides investment choice, access to advice and charges no higher than a standard PRSA. The quality of the product is such that approaching 1,000 individuals, predominately self-employed, had effected a PRSA with us by year end,” he said.

Excluding SSIA sales, annual premium equivalent was down by 20% to €60m for the year, again reflecting the uncertain market conditions, Standard Life said.

Commenting on the 29% fall in single premium sales, Standard Life said its decision not to offer a product containing cast-iron guarantees made it difficult to grow business at a time when consumers had been particularly risk averse. “Given the volatility of equity markets over the last three years we understand the consumer desire for investment products that contain guarantees. However, guarantees are extremely expensive and we do not believe consumers fully appreciate the drag on performance that is inevitable with these types of product. Some of the marketing on these so-called guaranteed products really does the industry no favours,” Standard Life’s sales and marketing director Nigel Dunne said.

The insurer added that it will invest an additional €30m in capital expenditure in Ireland over the next two years on IT infrastructure and product development.