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Standard Life plc - Annual Report and Accounts 2007
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UK financial services

Overview

Life and pensions

UK life and pensions is one of the largest pension and long-term savings and investment providers in the UK with a life and pensions market share of 9.7% and offers a broad range of products across insurance and investment wrappers. The business has particular strengths in the accumulation for retirement market. In 2007 the Wrap platform was complemented with the launch of Fundzone, a mutual fund supermarket.

Banking

Standard Life Bank offers mortgage and retail savings products in the UK via intermediaries, and also direct to all customers through telephone and internet platforms.

Healthcare

Standard Life Healthcare offers a range of private medical insurance (PMI) and healthcare solutions. It is the 4th largest PMI provider in the UK.

Performance

UK NBC: £27m in 05, £167m in 06, £282m in 07; Bank gross lending: £3.1bn in 05, £3.0bn in 06, £3.7bn in 07; Healthcare sales: £20m in 05, £20m in 06, £22m in 07

In 2007 the UK life and pensions new business margin improved by 0.6% points to 2.1%, which was ahead of the target of 2.0% by 2008. This reflected continued emphasis on controlling acquisition costs while driving volume and maximising the capital efficiency of product design. The internal rate of return (IRR) on new business increased to 20% from 13% in 2006. The SIPP product celebrated its third anniversary, with over £7.7bn of funds. The Wrap and Fundzone platforms grew assets under administration to over £1bn. Standard Life Bank gross lending increased by 22%.

Looking ahead

In 2008 UK financial services will continue to focus on growing new business profitability. This will be delivered through deepening distributor relationships, building broader customer relationships, continuing the development of innovative products and managing costs while providing excellent customer service. UK life and pensions continue to refine and enhance its market leading SIPP and Wrap proposition and will build on its market leading position in the nil commission Group pensions market. The business will deliver further value from the existing book by focusing on customer retention, risk management and capital efficiency. Standard Life Bank expects to maintain the quality of its mortgage portfolio and Standard Life Healthcare will introduce improved product propositions for individual and large corporate customers.

View Business segment performance - UK financial services for more detail.

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