(November 2, 2011) — British insurer Standard Life has revealed that it has missed sales growth expectations, largely blaming the shortfall on corporate pension schemes.
According to the insurer, its shortfall came as a result of corporate pension fund decisions to remain with existing providers rather than switch. “Pension scheme trustees when they see a lot of volatility tend not to move schemes,” Standard Life finance director Jackie Hunt told reporters on a conference call, according to Reuters. “They don’t want to be out of the market even for a couple of hours.”
Scotland’s largest insurer revealed that sales role 10% in the first nine months of the year, missing estimates.
Chief executive David Nish commented: “The third quarter saw very challenging conditions in global financial markets which have impacted values of assets and customer confidence, reducing the pace of fund flows…Although the economic backdrop continues to be uncertain, the outlook for our business is positive and we are confident in the future growth opportunities in our chosen markets.”
In October, hoping to recover its value following the collapse of Lehman Brothers, Standard Life sued 11 of its insurers who refused to pay a claim related to a cash injection into one of its pension funds. In a court hearing earlier, Sandy Crombie, Standard Life’s former chief executive officer and chairman, testified, noting that the company’s response to the losses was motivated by a desire to do “the right thing.” Last year, Standard Life was fined £2.45 million by the Financial Services Authority (FSA), which said it had misled investors.
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