REG-Standard Life plc Interim Management Statement - Part 1

Released: 29/10/2009

com:20091029:Rnsc5536B
                                                                                                                       .
RNS Number : 5536B  
  
Standard Life plc  
  
29 October 2009  
  
Standard Life plc  
  
Interim Management Statement - nine months to 30 September 2009  
  
29 October 2009   
  
Positive net inflows across the Group  
  
 
 * Standard Life Investments third party net inflows 75% higher at £4.3bn  
 * Life and pensions net inflows of £1.2bn1 
 * Life and pensions net inflows excluding bulk bond deals 18% higher at £1.8bn1 
 * Life and pensions net inflows in the third quarter 91% higher at £586m   
  
Strong growth in assets as markets recover  
  
 
 * Standard Life Investments total assets under management increased by £15.3bn 
in the third quarter 
 * Standard Life Investments third party assets under management 19% higher at 
£54.1bn  
 * SIPP assets under administration 27% higher at £11.0bn2 
 * Wrap assets under administration 76% higher at £3.0bn 
 * Group pensions assets under administration 19% higher at £17.1bn  
  
New business sales reflect impact of weaker average financial market levels  
  
 
 * Life and pensions sales 15% lower at £10.5bn3  
  
Group Chief Executive Sir Sandy Crombie said:   
  
"Standard Life has continued to deliver a reliable underlying performance in the 
first nine months of the year, despite the challenging market conditions. I am 
particularly pleased with the strong growth in assets, especially in the third 
quarter. This should benefit the Group's profits and cashflow in the years to 
come and is a testament to our track record, demonstrating the confidence shown 
in us by our customers.  
  
As announced last week, I am stepping down as Group Chief Executive at the end 
of December after 43 years at Standard Life. I am delighted to be handing over a 
business that, having positioned itself well to cope with the financial crisis, 
is in the right place to benefit from the recovery as and when it comes. 
Standard Life has a strong balance sheet, attractive products and significant 
growth opportunities and I wish my successor David Nish every success as he 
leads the business forward next year."  
  
Unless otherwise stated, all sales figures are on a PVNBP basis and all 
comparisons are in sterling and with the nine months ending 30 September 2008.   
  
Strong growth in assets as markets recover  
  
Continued demand for our broad and innovative product set, coupled with the 
recent upturn in market levels, has led to strong growth in assets under 
administration across the Group.   
  
Third party assets under management at Standard Life Investments have increased 
to a record level of £54.1bn. Good long term investment performance and the 
diversity of our fund range have led to significant growth in third party net 
investment inflows with a substantial contribution from our international 
operations as we expand our global presence. During the third quarter total 
assets under management increased by £15.3bn to £136.9bn.  
  
Within our life and pensions operations we have also seen strong growth in 
assets under administration with resilient customer run rates and positive net 
inflows demonstrating the strength of our propositions, excellence in customer 
service and strong distribution relationships. While markets have recovered 
sharply in recent months, average equity market levels over the nine month 
period were 25%4 lower than the prior year which has had an inevitable impact on 
net flows and new business sales. Nevertheless, net flows across our life and 
pensions operations have improved in the third quarter, with strong growth in 
our retail product lines in Canada following the successful repositioning of the 
business.  
  
Worldwide life and pensions operations  
  
Net inflows across our worldwide life and pensions operations1 were £1.2bn 
(2008: net inflow of £2.1bn), reflecting our decision not to renew UK bulk 
investment bond deals which were written in 2008 at lower margins in order to 
secure distribution relationships. These generated net inflows of £597m in 2008 
and led to net outflows of £581m in 2009. Excluding these bond deals, worldwide 
net inflows increased to £1.8bn (2008: £1.6bn). Worldwide life and pension sales 
were 15% lower at £10.5bn (2008: £12.4bn). Excluding the bond deals sales were 
11% lower.  
  
UK Financial Services  
  
Within our UK life and pensions business, net inflows of £356m (2008: £1,086m) 
and new business sales of £7.3bn (2008: £9.4bn) have been impacted by our 
decision not to renew bulk investment bond deals as described above. Excluding 
these deals, net flows strengthened to £937m (2008: £489m). As highlighted in 
previous years, our UK pensions business is seasonal with higher flows and sales 
in the first two quarters of the year reflecting increased activity levels 
around the tax year end.  
  
We continue to see strong growth in our individual SIPP customer base and assets 
under administration. During the period the total number of customer accounts 
increased to 79,100 (31 December 2008: 65,900, 30 June 2009: 74,700). The 
strength of our customer run rate and the recent recovery in financial markets 
have increased SIPP assets under administration to £11.0bn (31 December 2008: 
£8.7bn, 30 June 2009: £9.7bn)2. Across our SIPP portfolio the average case size 
was £139,000 (31 December 2008: £131,000, 30 June 2009: £130,000). The lower 
average market levels over the period have had an inevitable impact on incoming 
transfer values, which continue to represent the majority of new business. This 
has been reflected in net inflows, which were lower at £1.3bn (2008: £1.9bn), 
and a 25% reduction in new business sales to £2.2bn (2008: £2.9bn). During the 
period we have seen a modest increase in SIPP outflows. This has been driven by 
customers increasingly using the flexible features within the product such as 
taking tax free cash and income drawdown. These outflows remain consistent with 
our expectations.  
  
In group pensions, net inflows and positive market movements have driven an 
increase in UK group pensions assets under administration to £17.1bn (31 
December 2008: £14.4bn, 30 June 2009: £14.7bn)5. The quality, sustainability and 
flexibility of our proposition, combined with the financial strength of the 
Group, continue to act as key differentiators and enable us to win profitable 
new business. The number of new schemes implemented during the period was 317 
(2008: 380). Increments into existing schemes have been impacted by current 
economic conditions, including lower average levels of salary increases and 
recruitment across the UK. This trend, combined with lower average asset values 
has been reflected in lower net inflows of £962m (2008: £1,201m) and a 17% 
reduction in new business sales. Volumes in our flexible group SIPP increased by 
35% and accounted for 50% of total group pensions sales (2008: 31%).  
  
As reported in our Interim Results 2009, regular premium contributions in 
respect of the 18,000 member BT scheme generated £347m of PVNBP in the first 
half of 2009. Single premium asset transfers for the BT scheme of £220m were 
received during October and will be reflected in our reported sales figures for 
Q4. We are particularly pleased that three quarters of the active members have 
chosen to transfer to the scheme.  
  
Demand for mutual funds sold through our UK life and pensions business on our 
Wrap, Sigma and Fundzone platforms remains strong with net inflows increasing to 
£538m (2008: £257m) and sales 48% higher at £830m (2008: £559m).   
  
Assets under administration on our Wrap platform increased to £3.0bn (31 
December 2008: £1.7bn, 30 June 2009: £2.3bn)6. At the end of the quarter there 
were 532 IFA firms using the platform (31 December 2008: 409, 30 June 2009: 484) 
and 26,600 customers (31 December 2008: 16,900, 30 June 2009: 23,000) with an 
average fund size of £111,000 (31 December 2008: £101,000, 30 June 2009: 
£101,000)6. We continue to see strong momentum in our Wrap offering, with a 
strong pipeline of IFA firms in the process of adopting the platform.  
  
A number of endowment policies that were written during the early 1980s reached 
maturity during the period. This led to a net outflow of £1.1bn (2008: net 
outflow of £1.2bn) in respect of pre-Demutualisation life products. The vast 
majority of these products are conventional with profits contracts, which 
generate minimal shareholder margin. Excluding these flows, UK life and pensions 
net inflows amounted to £1.4bn during the period (2008: £2.3bn) within worldwide 
life and pensions net inflows of £2.3bn (2008: £3.4bn).  
  
Claims levels across our UK life and pensions operations remain broadly in line 
with assumptions, with lower claims in respect of individual pensions leading to 
a reduced net outflow from this product line.   
  
Savings balances in our banking operations have increased to £5.6bn (31 December 
2008: £5.0bn, 30 June 2009: £5.5bn) with business accounts performing well 
during 2009. This total includes combined SIPP and Wrap balances of £1.8bn (31 
December 2008: £1.5bn, 30 June 2009: £1.8bn).  
  
Consistent with our strategy to manage our mortgage exposure, gross mortgage 
lending decreased by 78% to £210m (2008: £946m). Mortgages under management 
stood at £8.2bn (31 December 2008: £9.7bn, 30 June 2009: £8.8bn), with an 
arrears rate of 0.78%, which is less than a third of the Council of Mortgage 
Lenders industry average of 2.62% reported at 30 June 2009.   
  
Healthcare sales were 21% lower at £15m (2008: £19m) on an APE basis reflecting 
adverse economic conditions and our strategy of only writing profitable 
business.  
  
Europe 
  
  
In Europe, net inflows were 27% lower at £564m (2008: £771m)7 and sales were 26% 
lower in constant currency at £854m (2008: £1,063m).  
  
In Ireland, sales of £589m (2008: £661m) were 15% lower in constant currency. 
Domestic sales increased by 29% in constant currency, driven by increased sales 
of post-retirement products during the second quarter ahead of planned changes 
to tax legislation. However, offshore bond sales were 42% lower at £252m (2008: 
£433m) due to the impact of the weak economic conditions experienced during the 
year.  
  
Sales in Germany of £265m (2008: £402m) were 43% lower than the prior year in 
constant currency. This reflects weak consumer confidence and a continuing 
preference for the German domestic life insurers. Net flows of £492m were more 
resilient and were 4% higher (2008: £471m) due to strong inflows of regular 
premiums from the in-force book.  
  
Canada  
  
Canadian net inflows of £328m (2008: £292m) reflect higher gross inflows into 
individual insurance, savings and retirement product lines, with positive trends 
in the retail market driving a marked turnaround in net inflows to £189m (2008: 
net outflow £12m) during the third quarter.  
  
Canadian sales were 12% higher in constant currency at £1,938m (2008: £1,562m) 
with sales in the third quarter significantly higher than those recorded during 
the same period in 2008. Group savings and retirement sales of £964m were 7% 
lower in constant currency due to the distorting impact of a large defined 
benefit administration mandate secured in 2008. Within the Group savings and 
retirement total, sales of our core defined contribution offering increased by 
41% in constant currency to £810m (2008: £519m).  
  
Individual insurance, savings and retirement new business has increased by 58% 
in constant currency to £442m (2008: £252m) with strong sales growth of 153% 
achieved in the third quarter amid early signs of a recovery in the previously 
challenging Canadian retail market. However, the market for mutual funds remains 
challenging, where new business sales over the period were 22% lower in constant 
currency at £155m (2008: £180m).   
  
Group insurance new business has also increased by 82% in constant currency to 
£377m (2008: £187m). This increase is due to changes to renewal assumptions, 
which were made as part of the year end process and were reflected in our 2008 
Preliminary Results.  
  
Asia 
  
  
Combined sales across our Indian and Chinese joint ventures and our Hong Kong 
operation were 6% higher in constant currency at £448m (2008: £373m)8.   
  
Sales in India increased by 1% in constant currency as we continue to refocus 
the business for greater profitability. Standard Life's share of these sales was 
£301m (2008: £275m)8.   
  
In China, sales volumes decreased by 9% in constant currency. Standard Life's 
share of these sales was £78m (2008: £66m). The lower sales reflect reduced 
consumer confidence caused by the economic downturn.   
  
Hong Kong has continued to enjoy strong growth due to the success of its new 
unit-linked savings product, with new business sales in constant currency 
increasing by 72% to £69m (2008: £32m).  
  
Global investment management  
  
At Standard Life Investments, strong inflows across our international markets, 
and the recent recovery in market levels, have driven an increase in third party 
assets under management to a record level of £54.1bn (31 December 2008: £45.5bn, 
30 June 2009: £47.3bn). Third party assets under management now represent 39% of 
total assets under management compared with 37% as at 31 December 2008. Total 
assets under management increased by £15.3bn in the third quarter to £136.9bn 
(31 December 2008: £123.8bn, 30 June 2009: £121.6bn).   
  
Despite volatile markets Standard Life Investments achieved strong third party 
net inflows of £4.3bn, £3.2bn of which relates to investment products only, 
representing a 75% increase over the equivalent period last year and an 
annualised 13% of opening third party assets under management. Over 85% of the 
net inflows came from outside the UK, further emphasising Standard Life 
Investments' growing global capability.   
  
In UK and Europe, we have seen strong client demand for our Fixed Interest and 
Global Absolute Return Strategy (GARS) products, while sales of our mutual fund 
and SICAV9 ranges showed very significant increases on the same period last year 
with net inflows of retail mutual funds of £444m (2008: net inflow £57m).   
  
While conditions remain challenging within the UK market for segregated 
institutional mandates, we have seen strong growth in institutional flows across 
our international markets. Total European net flows rose to £913m (2008: net 
inflow £373m), with a significant increase in net flows in India of £1,630m 
(2008: £219m)10 reflecting greater traction into higher margin cash funds. In 
addition we have seen strong inflows into Canadian institutional business of 
£1,021m (2008: net outflow £102m).  
  
The money-weighted active investment performance over all time periods (1, 3, 5 
and 10 years) continues to be comfortably above median for our third party 
business. The strength of our investment process across a range of OEICs and 
unit trusts is demonstrated by the proportion of eligible actively managed funds 
(21 out of 29) rated 'A' or above by Standard & Poor's.   
  
Of particular note is the outstanding performance of the UK Equity Recovery Fund 
(OEIC), which has returned 110% since its launch on 6 March this year, and the 
UK Equity Unconstrained Fund (OEIC), which has produced a return of over 95% 
during the year to date.  
  
The pipeline for institutional and retail business remains encouraging with 
fixed interest and GARS products attracting a lot of interest. We also continue 
to see very positive demand for our mutual funds in the UK and for our SICAVS9 
in continental Europe.  
  
Capital strength maintained  
  
In our Interim Results 2009 on 5 August 2009, we reported that Standard Life had 
a robust capital position that had been largely insensitive to market movements. 
At the end of September 2009 there was a modest strengthening of this position, 
with rising equity markets and lower gilt yields increasing our estimated FGD 
surplus to £3.4bn (31 December 2008: £3.3bn, 30 June 2009: £3.1bn) and HWPF 
residual estate to £0.5bn (31 December 2008: £0.5bn, 30 June 2009: £0.4bn).  
  
Other developments  
  
On 9 September 2009 we announced that the Chinese Regulators were in the final 
stages of approving a business combination whereby Bank of China would take a 
majority stake in Heng An Standard Life. The company would then become a 
domestic insurance company. The commercial details, together with any further 
approvals required are now being discussed between the parties.  
  
On 19 October 2009 we announced that David Nish will succeed Sir Sandy Crombie 
as Group Chief Executive with effect from 1 January 2010.  
  
On 26 October 2009 we announced that we had entered into an agreement to sell 
Standard Life Bank plc ("Standard Life Bank") to Barclays Bank PLC ("Barclays"). 
We also announced that Standard Life and Barclays UK Retail Banking have agreed 
heads of terms to enter into a strategic agreement to explore joint 
opportunities in the UK retail long-term savings and investments sector.  
  
Standard Life Group outlook  
  
Standard Life has a resilient balance sheet, innovative propositions and strong 
distribution relationships which position us well for any future market upturn. 
  
  
While the outlook for the UK savings and investment market remains challenging 
in the short term, we are confident in the prospects for our pensions businesses 
and Wrap proposition.  We see opportunities for our Asian business and in Canada 
have a good pipeline of business developing around our core defined contribution 
proposition.  
  
Standard Life Investments continues to see strong demand for Fixed Interest and 
Global Absolute Return Strategy (GARS) products which will further increase our 
global capability.  
  
Our continued ability to attract positive net inflows, combined with the recent 
upturn in market levels, has led to strong growth in assets across the Group. If 
sustained, this will lead to higher revenues and cash profits.  
  
For a PDF version of this Interim Management Statement, including a PDF of this 
Press Release, please click here:  
  
http://www.rns-pdf.londonstockexchange.com/rns/5536B_-2009-10-28.pdf  
  
 
  For further information please contact:                   
                                                            
  Institutional Equity Investors:                           
                                                            
  Gordon Aitken              0131 245 6799                  
  Duncan Heath               0131 245 4742                  
  Paul De'Ath                0131 245 9893                  
                                                            
  Retail Equity Investors:                                  
                                                            
  Capita Registrars          0845 113 0045                  
                                                            
  Media:                                                    
                                                            
  Barry Cameron              0131 245 6165 / 07712 486 463  
  Paul Keeble                0207 872 4481 / 07712 486387   
  Neil Bennett (Maitland)    0207379 5151 / 07900 000 777   
                                                            
  Debt Investors:                                           
                                                            
  Andy Townsend              0131 245 7260                  
  Alan Coutts                0131 245 0201                  
  
  
Notes to Editors  
  
 
  1   Worldwide life and pensions net flows do not include net  
      flows in respect of our Asia Pacific joint ventures and   
      our Hong Kong subsidiary.                                 
                                                                
  2   Analysis of Individual SIPP funds under administration.   
  
  
 
                                                  30 Sep      30Jun      31 Mar      31 Dec     
                                                  2009        2009       2009        2008       
                                                  £m          £m         £m          £m         
     Insured Standard Life funds                  2,757       2,495      2,375       2,559      
     Insured external funds                       1,621       1,370      1,229       1,268      
     Collectives - Standard Life Investments      1,605       1,201      947         864        
     Collectives - Funds Network                  913         764        658         656        
     Cash                                         1,114       1,092      1,056       869        
     Non collectives                              3,023       2,796      2,540       2,443      
     Total                                        11,033      9,718      8,805       8,659      
                                                                                                
     Insured                                      4,378       3,865      3,604       3,827      
     Non-insured                                  6,655       5,853      5,201       4,832      
     Total                                        11,033      9,718      8,805       8,659      
  
  
 
     Of the £11.0bn funds under administration at 30 September  
     2009, £1.4bn relate to funds on the Wrap platform.         
                                                                
  
  
 
  3    Present value of new business premiums (PVNBP) is calculated  
       as 100% of single premiums plus the expected present value of 
       new regular premiums.                                         
                                                                     
  4    The daily average level of the FTSE All share index was 25%   
       lower over the nine months to 30 September 2009 when compared 
       to the same period in 2008.  On the same basis the UK IPD All 
       Property Index was 25% lower and the Sterling 5-10 Yr         
       Corporate Securities Index was down 12%.                      
                                                                     
  5    The group pensions AUA figure as at 31 December 2008 has been 
       restated to align with the methodology used for other product 
       lines.                                                        
                                                                     
  6    Wrap assets under administration have been restated to        
       exclude amounts that have been secured but are pending        
       investment onto the Wrap platform.The impact of this          
       restatement has been immaterial, reducing the assets under    
       administration figures as at 31 December 2008 by £0.1bn.      
                                                                     
  7    Offshore bond net inflows of £100m (2008: £420m) are included 
       within the European results.                                  
                                                                     
  8    2008 PVNBP includes a £40m reduction due to a restatement to  
       opening assumptions in India.                                 
                                                                     
  9    A SICAV (societe d'investissement ss capital variable) is an  
       open-ended collective investment scheme common in Western     
       Europe.SICAVs can be cross-border marketed in the EU under    
       the UCITS directive.                                          
                                                                     
  10   Historically, the Indian cash fund flows were calculated on   
       the spot rate balances. Due to the volatility of these funds, 
       the approach has been changed to ensure consistency with the  
       methodology applied to UK money market funds.                 
                                                                     
  11   There will be a conference call today for newswires and       
       online publications at 8:00am hosted by David Nish, Group     
       Finance Director, Keith Skeoch, Chief Executive of Standard   
       Life Investments, and Paul Matthews, Managing Director of     
       Distribution for UK Financial Services.Dial in telephone      
       number +44 (0) 1452 555 566.Callers should quote Standard     
       Life Media Call. The conference ID number is 35954645.A       
       recording of this call will be available for replay for one   
       week by dialling +44 (0)1452 550 000 (access code 35954654#). 
                                                                     
  12   There will be a conference call today for analysts and        
       investors at 9.30am hosted by David Nish, Group Finance       
       Director, Keith Skeoch, Chief Executive of Standard Life      
       Investments, and Paul Matthews, Managing Director of          
       Distribution for UK Financial Services.Dial in telephone      
       number +44 (0) 1452 555 566.Callers should quote Standard     
       Life Analysts & Investors Call.The conference ID number is    
       35958422.A recording of this call will be available for       
       replay for one week by dialling +44 (0)1452 550 000 (access   
       code 35958422#).                                              
                                                                     
  13   This Interim Management Statement is available on the         
       Financial Results page of the Standard Life website at        
       www.standardlife.com                                          
                                                                     
  
  
Insurance operations net flows (regulatory basis)  
  
9 months ended 30 September 2009  
  
 
                                                 Gross inflows   Redemptions    Net inflows    Gross inflows   Redemptions    Net inflows   
                                                 9 months to     9 months to    9 months to    9 months to     9 months to    9 months to   
                                                 30 Sep 2009     30 Sep 2009    30 Sep 2009    30 Sep 2008     30 Sep 2008    30 Sep 2008   
                                                 £m              £m             £m             £m              £m             £m            
  UK                                                                                                                                        
  Individual SIPP (a)                            2,113           (790)          1,323          2,542           (623)          1,919         
  Individual pensions                            738             (1,667)        (929)          922             (2,336)        (1,414)       
  Group pensions(a)                              1,792           (830)          962            2,054           (853)          1,201         
  Institutional pensions                         1,565           (663)          902            1,510           (924)          586           
  Pensions                                       6,208           (3,950)        2,258          7,028           (4,736)        2,292         
  Investment bonds                               242             (1,282)        (1,040)        1,267           (1,186)        81            
  Mutual funds (b) (c)                           701             (163)          538            516             (259)          257           
  Savings and investments                        943             (1,445)        (502)          1,783           (1,445)        338           
  Annuities                                      486             (860)          (374)          456             (823)          (367)         
  Protection                                     72              (44)           28             83              (55)           28            
  Legacy life                                    303             (1,357)        (1,054)        354             (1,559)        (1,205)       
  UK life and pensions(d) (e)                    8,012           (7,656)        356            9,704           (8,618)        1,086         
                                                                                                                                            
  Europe                                                                                                                                    
  Ireland(d)                                     635             (563)          72             724             (424)          300           
  Germany                                        583             (91)           492            520             (49)           471           
  Europe life and pensions                       1,218           (654)          564            1,244           (473)          771           
                                                                                                                                            
  Canada                                                                                                                                    
  Group savings and retirement                   1,018           (751)          267            1,135           (827)          308           
  Individual insurance, savings and retirement   494             (509)          (15)           314             (475)          (161)         
  Group insurance                                261             (212)          49             228             (135)          93            
  Mutual funds (b)                               155             (128)          27             180             (128)          52            
  Canada life and pensions                       1,928           (1,600)        328            1,857           (1,565)        292           
                                                                                                                                            
  Total worldwide life and pensions              11,158          (9,910)        1,248          12,805          (10,656)       2,149         
  excluding Asia                                                                                                                            
                                                                                                                                            
  
  
(a) Included within non-insured SIPP is an element which is also included within 
UK mutual funds net flows in the third party Investment operations figures.  
  
(b) The mutual funds net flows are also included within mutual fund net flows in 
the third party Investment operations figures.  
  
(c) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated 
to reflect inclusion of these mutual funds. The total net outflow for the period 
was £22m (2008: £176m outflow).  
  
(d) The offshore business is shown within the total Ireland result. This was 
previously included within UK life and pensions. The total net inflow for the 
period was £100m (2008: £420m inflow).  
  
(e) UK life and pensions include a total net outflow of £1,645m in relation to 
conventional with profits business (2008: £1,795m outflow).  
  
Insurance operations new business  
  
9 months ended 30 September 2009  
  
 
                                                 Single Premiums                                   New Regular Premiums                                   PVNBP                                                                                         
                                                 9 months          9 months to 30 Sep 2008         9 monthsto30 Sep 2009   9 monthsto 30 Sep 2008         9 months to30 Sep 2009   9 months to 30 Sep 2008   Change  (g)   Changein constant currency   
                                                 to 30 Sep 2009                                                                                                                                                            (g) (h)                      
                                                 £m                £m                              £m                      £m                             £m                       £m                        %             %                            
  UK                                                                                                                                                                                                                                                    
  Individual SIPP(a)                             1,976             2,611                           45                      55                             2,179                    2,889                     (25%)         (25%)                        
  Individual pensions(b)                         333               472                             19                      26                             379                      571                       (34%)         (34%)                        
  Group pensions(a)(b)                           544               868                             352                     353                            1,905                    2,292                     (17%)         (17%)                        
  Institutional pensions                         1,384             1,410                           14                      60                             1,414                    1,554                     (9%)          (9%)                         
  Pensions                                       4,237             5,361                           430                     494                            5,877                    7,306                     (20%)         (20%)                        
  Investment bonds                               194               1,186                           -                       -                              194                      1,186                     (84%)         (84%)                        
  Mutual funds (c)                               683               509                             19                      7                              830                      559                       48%           48%                          
  Savings and investments                        877               1,695                           19                      7                              1,024                    1,745                     (41%)         (41%)                        
  Annuities                                      353               361                             -                       -                              353                      361                       (2%)          (2%)                         
  Protection                                     -                 -                               1                       2                              2                        6                         (67%)         (67%)                        
  UK life and pensions(d)                        5,467             7,417                           450                     503                            7,256                    9,418                     (23%)         (23%)                        
                                                                                                                                                                                                                                                        
  Europe                                                                                                                                                                                                                                                
  Ireland(d)                                     561               615                             7                       9                              589                      661                       (11%)         (15%)                        
  Germany                                        15                30                              20                      36                             265                      402                       (34%)         (43%)                        
  Europe life and pensions                       576               645                             27                      45                             854                      1,063                     (20%)         (26%)                        
                                                                                                                                                                                                                                                        
  Canada                                                                                                                                                                                                                                                
  Group savings and retirement                   339               503                             43                      33                             964                      943                       2%            (7%)                         
  Individual insurance, savings and retirement   418               236                             2                       1                              442                      252                       75%           58%                          
  Group insurance(e)                             1                 -                               22                      26                             377                      187                       102%          82%                          
  Mutual funds                                   155               180                             -                       -                              155                      180                       (14%)         (22%)                        
  Canada life and pensions                       913               919                             67                      60                             1,938                    1,562                     24%           12%                          
                                                                                                                                                                                                                                                        
  Asia                                                                                                                                                                                                                                                  
  India(f)                                       9                 12                              61                      73                             301                      275                       9%            1%                           
  China(f)                                       37                47                        (i)   8                       3                        (i)   78                       66                        18%           (9%)                         
  Hong Kong                                      4                 8                               12                      6                              69                       32                        116%          72%                          
  Asia life and pensions                         50                67                              81                      82                             448                      373                       20%           6%                           
                                                                                                                                                                                                                                                        
  Total worldwide life and pensions              7,006             9,048                           625                     690                            10,496                   12,416                    (15%)         (18%)                        
  
  
(a) Included within non-insured SIPP is an element which is also included within 
UK mutual funds net flows in the third party Investment operations figures.  
  
(b) Single premiums include Department of Work and Pensions rebate premiums of 
£246m (2008: £272m), comprising Individual pension rebates of £134m (2008: 
£148m) and Group pensions rebates of £112m (2008: £125m).  
  
(c) UK figures include Sigma UKFS mutual funds. 2008 figures have been restated 
to reflect inclusion of these mutual funds. The 2009 impact in PVNBP is £117m 
(2008: £66m).  
  
(d) The offshore business is shown within the total Ireland result, comprising 
single premiums of £252m (2008: £433m) and PVBNP of £252m (2008: £433m). This 
was previously included within UK life and pensions.  
  
(e) Canada Group insurance includes £1.1m (2008: £2.4m) of new regular premiums 
in respect of Consultaction policies, representing the comparable full premium 
for £0.1m (2008: £0.3m) of new annualised fee income.  
  
(f) Standard Life's share of the Joint Venture Company's new business.  
  
(g) % change is calculated on the figures rounded to millions.  
  
(h) Calculated using constant rates of exchange.  
  
(i) Regular premiums in China of £2m for Group protection business have been 
reclassified to single premiums for the nine months to 30 September 2008.   
  
(j) New business gross sales for overseas operations are calculated using 
average exchange rates. The principal average rates for the nine months to 30 
September 2009 were £1: C$1.79 (2008: £1: C$1.98) and £1: E1.12 (2008: £1: 
E1.29).  
  
  Investment operations  
  
9 months ended 30 September 2009  
  
 
                                                                   Opening FUM    Gross inflows         Redemptions   Net inflows   Market and other movements   Net movement    Closing FUM   
                                                                   1 Jan 2009                                                                                    in FUM          30 Sep 2009   
                                                                   £m             £m                    £m            £m            £m                           £m              £m            
  UK                                      Mutual funds (a)         4,237          1,116           (b)   (672)         444           816                          1,260           5,497         
                                          Private equity           3,859          56                    (3)           53            (276)                        (223)           3,636         
                                          Segregated funds         11,312         820                   (1,056)       (236)         1,475                        1,239           12,551        
                                          Pooled property funds    917            48                    -             48            144                          192             1,109         
  Total UK                                                         20,325         2,040                 (1,731)       309           2,159                        2,468           22,793        
  Canada                                  Mutual funds (a)         1,295          159             (c)   (132)         27            191                          218             1,513         
                                          Separate mandates (d)    1,375          1,092                 (71)          1,021         355                          1,376           2,751         
  Total Canada                                                     2,670          1,251                 (203)         1,048         546                          1,594           4,264         
  International                           Europe                   840            933                   (20)          913           132                          1,045           1,885         
                                          Asia (excluding India)   79             4                     (5)           (1)           13                           12              91            
                                          India(e)                 1,454          (144)                 -             (144)         440                          296             1,750         
  Total International                                              2,373          793                   (25)          768           585                          1,353           3,726          
  
  
More to follow, for following part double-click [nRn2c5536B]