Standard Life loses out as investors go elsewhere

Standard Life, the UK's largest mutual insurer, saw its UK market share fall by more than a quarter last year, it revealed yesterday, as customers took their business elsewhere after the company's solvency crisis 14 months ago.

Standard Life, the UK's largest mutual insurer, saw its UK market share fall by more than a quarter last year, it revealed yesterday, as customers took their business elsewhere after the company's solvency crisis 14 months ago.

Having moved the end of its financial year from 15 November to 31 December, yesterday's full-year results reported the 13 and a half months from 16 November 2003 to the end of 2004. However, sales in its UK life and pensions business over this extended period were still down almost 2 per cent compared with the 12 months to mid-November 2003. UK market share fell from 11 to 8 per cent over the period, while among independent financial advisers Standard surrendered its market-leading position to Norwich Union, as its market share fell from 15.9 to 11.2 per cent.

Sandy Crombie, the group chief executive, said his focus over the coming year would be to write profitable business rather than to regain market share.

Overall group insurance performance was redeemed by a one-off increase in German sales, sparked by a change in tax regulations. But the management said German sales are expected to be significantly lower in 2005. World-wide insurance sales were up 11 per cent in the 13.5 months, compared with the previous 12 months.

Mr Crombie reiterated the group's intention to demutualise and float on the London Stock Exchange next year.

John Hylands, the outgoing finance director, moved to reassure members that the company's capital position was now stable - after the sale of more than £7.5bn of equities last year and the issue of £550m of debt.

Mr Crombie said he had a shortlist of candidates for Mr Hylands' replacement, and hoped to have someone in place by the summer. Standard's accounts also revealed it recently became the latest large company to shut its final-salary scheme to new business. The £1bn scheme now has a £218m deficit.