British insurer Standard Life beat forecasts with a 30 percent rise in first-quarter sales, helped by growth in corporate pensions and in its core retail products, as UK consumers shrugged off economic woes.
What we'd all underestimated was the resilience of the man and woman on the UK high street to go out and buy financial products. There has been a huge surge back, analyst Kevin Ryan at ING in London said. He added the numbers should herald good news from UK rivals Aviva and Legal & General , which report next month.
Edinburgh-based Standard Life, Britain's fourth-biggest insurer by market value, said life and pensions sales for the three months to March 31 totaled 4.6 billion pounds ($6.97 billion), up from 3.6 billion in the same period last year.
Analysts had expected long-term savings sales of 3.76 billion pounds on average, according to a company consensus.
We see this as a strong start to the year and a continuation of the momentum that we saw building toward the end of 2009, interim chief financial officer Jackie Hunt said.
Shares in the group, which have dropped almost 9 percent so far this year, were up 2.1 percent at 197.5 pence around 0815 GMT, beating a 0.3 percent drop in the muted European sector, as Greek debt woes and fears of contagion continued to unsettle.
UK-focused Standard Life saw a bounce back across most of its retail offering, helped in part by a new pension product that has helped revive customer interest. Sales of its key self-invested personal pension (SIPP) -- a platform that allows customers more flexibility as they accumulate funds -- were up 22 percent and mutual funds up 74 percent.
The insurer said it also saw great potential for its UK corporate business, which helped lift UK sales overall a total of 35 percent over the quarter to the end of March.
In UK corporate pensions, Standard Life has been hit by lower salary increases and recruitment as the economy teeters out of recession, but it said attracting new schemes, had helped lift sales there 21 percent. It saw a strong pipeline, with recent wins including the pension scheme of software firm Logica , with 5,000 members.
Britain, which accounts for almost three-quarters of Standard Life's sales, also saw an improvement in retail net flows with an outflow of 163 million pounds, compared to 832 million leaving the company in the same period last year, when it did not renew some lower-margin investment bond deals.
The outflows were affected by an increase in activity ahead of the change in minimum retirement age from 50 to 55 in April.
The group said total net inflows more than tripled to 2.1 billion pounds, while long-term savings net inflows rose to 1 billion from just 100 million in the same period last year.
UK-focused Standard Life is the first major UK insurer to publish a first-quarter trading update.
Outside its core market, Standard Life saw Canadian sales rise 15 percent in the quarter, while Europe climbed 26 percent as Irish growth offset a drop in Germany.
(Reporting by Clara Ferreira-Marques; editing by Simon Jessop and Jon Loades-Carter)