December 5, 2001	Wednesday	Ramazan 19, 1422

LONDON, Dec 4: Standard Life, Europe’s largest mutual life assurer, on Tuesday reported record annual new business, driven by strong life and pensions sales in Britain, but said it was unlikely to keep up the pace of growth for long.

Standard Life said worldwide new business sales leapt 61 per cent to 8.3 billion pounds ($11.8 billion) for the year ended November 15, including a 76 percent jump in new business from its home market in the UK, where a financial crisis at Equitable Life [EQU.UL] sent customers into the arms of UK rivals.

We have been particularly successful in the UK, with sales of life and pension products well in excess of our expectations, Managing Director Scott Bell said in a statement.

UK new business sales totalled 6.3 billion pounds, with individual pension sales up 60 per cent, and group pensions and annuities almost doubling.

On a less volatile measure of new business, Standard Life’s total effective income, which takes all annual premiums and a 10th of single premiums, rose 59 per cent to 1.5 billion pounds, including 1.2 billion pounds from the UK, up 73 per cent.

Mutual fund sales in the UK fell 13 per cent to 220 million pounds.

UK life assurers have experienced a surge in new business, particularly in pension products, as concerns about low interest rates and weak share markets prompt increasingly affluent customers to plan more carefully for their retirement.

There has also been a so-called flight to quality in the aftermath of troubles at Equitable Life, the mutual insurer forced to close its doors to new business almost a year ago.

It’s been an outstanding year, Standard Life’s new finance director, John Hylands, told BBC radio.

Companies, too, are concerned about how to meet their pension liabilities, with many still offering defined-benefit schemes whereby they guarantee to pay retired workers a minimum sum, regardless of how investment markets perform.

Standard Life, which defeated an attempt last year by Australian fund manager Fred Woollard to get it to float on the London stock market, attributed part of its success in 2001 to its mutual status.

Mutual businesses typically have a lower cost of capital than their listed rivals because they do not have to pay dividends, and they can therefore offer competitive products.

Standard Life has maintained its independence while rivals have either converted to public companies or been bought up by other financial services groups.

Lloyds TSB bought Scottish Widows, another mutual and Abbey National snapped up Scottish Provident.—Reuters