Standard Life man looking at float options
Saturday 13 April 1996
It also admitted that it has been considering whether to take over a UK building society to broaden its business in the mortgage market.
The insurer has issued a CV for Mr Thomson stating that an examination of both was part of his responsibility before his promotion this week to chief investment manager, responsible for pounds 44bn of society funds.
But the company strongly denied it had any plans to demutualise, and added that no decision had yet been reached on whether to carry the idea of a building society takeover forward.
Jim Stretton, chief executive of Standard Life's UK operation yesterday, said: "Continuing speculation that [we] will demutualise forces us to restate that we have no plans to [do so]. It would not be in our policyholders' best interests.
"Mutuals have consistently produced better returns for their policyholders than proprietary companies in the past and Standard Life's record has been second to none."
Mr Stretton's comments were part of a careful damage limitation exercise aimed at snuffing out a potential de-mutualisation fever among its 3 million- plus policyholders.
Mr Stretton added that Standard Life did not need to seek outside funds to finance any of its future ventures: "[We are] extremely strong financially, being one of only a handful of life companies in the world with a Triple A rating from both Standard & Poor and Moody's." It comes as virtually every top-10 building society has announced plans to abandon its mutual status, giving more than 15 million saving and borrowing members free shares worth an average of pounds 1,000 each.
Insurance analysts believe the insurance sector is set for a radical shake-out in the next five years, with up to half the 100-plus mutual insurers now in operation merging or being taken over by rivals.
Norwich Union, the second-largest UK mutual insurer, announced in October that it was examining the option of a pounds 1.7bn stock market flotation, claiming that de-mutualisation would give it the funds needed to expand the range of services it offers. A decision by NU is expected by the end of this year.
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