Standard Life sales setback

BRITAIN'S largest mutual insurer Standard Life reported a 22% fall in 2003 worldwide new business sales, but said it was optimistic after demand rose at the end of the year.

Chief executive Iain Lumsden said the decline in new sales followed large increases in the two preceding years after the Edinburgh-based giant attracted an influx of customers from Equitable Life and other closed funds.

Lumsden said: 'Over three years we are up 17% per annum in the UK and 13% worldwide, so over the three years of the bear market we have done quite well.'

He denied that Standard had deliberately scaled back on sales to avoid strain on its capital. 'I would never try to hold back sales, but they could not continue at 2001 levels,' he said.

The insurer has about 55% of its portfolio in shares - 15% to 20% more than most rivals. Lumsden added: 'We are still betting heavily on the stock market long term.'

He hopes to see endowment shortfalls reduce next year if markets continue to improve.