Fury over Standard Life float plans

FURIOUS Standard Life policyholders today called for an investigation into the 'skeletons in the cupboard' at the mutual in a move that threatens to destabilise it in the critical run-up to its stock market flotation next year.

Evening Standard Life Action Group wants an independent probe into the reasons behind the board's decision to demutualise. It has enlisted the help of a team involved in legal action on behalf of Names who lost a fortune at Lloyd's of London in the 1990s.

Speaking outside the annual general meeting in Edinburgh, Stuart Kurz, 53, said: 'My policy has been decimated and I'm not happy about it. We have been stitched up left, right and centre and we have no idea what the end product of this demutualisation will be.'

The group has launched its campaign with the slogan: 'Do you suspect something is not quite right?'

Chief executive Sandy Crombie reiterated that demutualisation was the only option left open to the group, given the dire need for capital to grow the business. Crombie was promoted to replace Iain Lumsden last year after the parlous state of Standard Life's financial health was laid bare by a Financial Services Authority review.

He insisted the group had made a good start to the year despite first-quarter figures showing it wrote just £229m of new UK life and pensions business in the three months to the end of March, up only £2m on a year earlier.

Crombie is pulling back from unprofitable product areas in a bid to bolster the balance sheet ahead of the demutualisation push. Critics claim Lumsden wasted cash by chasing market share.

Standard Life's market share in life and pensions fell from 10.8% to 8.6% last year, and Crombie warned sales could decline again this year as he changes the product mix.

'I wouldn't be surprised if our market share was smaller this year,' he said. 'What we intend to do is establish 2005 as a new base from which to grow profitably.'

The stark admission is likely to fuel yet more criticism from Standard Life savers, many of whom admitted on their way into the meeting that they were undecided about whether demutualisation was the best course.

? Standard Life chairman Sir Brian Stewart today said he intends to remain as head of the insurer when it lists, despite his position at the helm of breweries giant Scottish & Newcastle. Saying he could not see why he would not be able to hold part-time posts at both FTSE 100 companies, he added: 'It's not against the Higgs recommendations. Higgs says comply or explain and I've only two roles, that's it.'