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Standard Life plc - Annual Report and Accounts 2007
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Canada - New business sales and profitability

Sales fell by 19% in constant currency to £1,654m PVNBP (2006: £2,091m). Excluding exceptionally large transactions in both years, underlying sales volumes fell by 8%. This underlying trend reflects our focus on margin over volume and the planned realignment of our distribution capability.

Canada PVNBP Sales £1,654m (2006 : £2,091m): Group savings and retirement: £1,188m (2006), £838m (2007); Individual insurance, savings and retirement: £460m (2006), £357m (2007); Group insurance: £143m (2006), £175m (2007); Mutual funds: £300m (2006), £284m (2007)

Group savings and retirement sales decreased by 27% in constant currency, despite benefiting from a large transaction in the fourth quarter of £196m. Competition within the market remains aggressive and quote activity across all segments has reduced. The reduction in Individual insurance, savings and retirement sales reflects the realignment of our sales operations and the inclusion of unprofitable Universal life sales in 2006. Sales of mutual funds were also impacted by this realignment and decreased by 3% in constant currency. In Group insurance, sales volumes increased, reflecting our success in the disability insurance segment following our strategic repositioning in that market. In early 2008 we have also secured a large client in this segment, highlighting our leadership in this area.

Canada NBC: £(2m) in 05, £28m in 06, £37m in 07New business contribution (NBC) increased by 38% in constant currency to £37m (2006: £28m). This improvement is largely due to the repricing of certain life products, a shift to sales of higher margin products and the impact of operational efficiencies achieved through expense reductions. Mutual funds have also been included for the first time. PVNBP margins reached 2.3%, up from 1.6% achieved in 2006.