Standard Life reports 79% surge in new business for first quarter

PENSIONS and investment group Standard Life achieved a 79% increase in new business in the first quarter of 2011, boosted by a 50% rise in single premium investments.

The group, which operates two divisions in Ireland, said sales in its domestically driven business rose 62%.

Its Standard Life International business, which sells mainly to British clients, nearly doubled sales in the first three months of the year, as business grew 93%, due to the group putting new distribution channels in place.

Standard Life has had a good start to the year “despite challenging market conditions,” said Nigel Dunne, its chief executive.

“A variety of factors have co-incided to produce a multiplier effect” that resulted in the sharp increase in sales, he said.

One key factor was the need of the consumer who demanded greater security when it comes to making decisions about their pensions and investments, Mr Dunne said.

He added the group’s “strong credit rating and the policyholder protection scheme provided by the UK Financial Services Compensation Scheme gives consumers more confidence” at a time when financial security is a core concern.

In the home market, sales of buy out bonds continued their strong growth pattern driven “unfortunately” by the continuing level of redundancies, Mr Dunne said.

The single premium end of its business got a fillip from the recent launch of its PRSA pension product as well as the general increase in demand for retirement products.

In its statement with the Q1 figures the group said it has concerns for the outlook for pensions growth posed by the threat of changes in tax relief.

Such a move would make pensions “less attractive” and undermine the take up of retirement packages in general.

“The risk is the government makes long term pension policy errors that materially damage the quality of life for generations of Irish people in retirement,” Mr Dunne warned

Income tax reliefs on pension contributions must be maintained to keep people saving, he said. A proposal to introduce a levy of 0.5% on pension funds “would also have long term impact on pension values.

“This levy could be substantially reduced if it was spread across all savings and investments products, including bank deposits,” Mr Dunne said.