Life and pensions giant Standard Life today became the latest insurer to soothe nerves over its ability to withstand market turmoil.
The Edinburgh-based firm’s capital buffer fell by just £100 million to £3.4 billion in the three months to September 30 and it said it could ride out a further 40% fall in stock markets.
Concerns have mounted that insurers’ capital strength could be whittled away by tumbling share prices, but chief executive Sandy Crombie said the firm had put in a “solid performance” this year despite the turbulence.
“The conservative investment management policies we have adopted over the past few years have resulted in a balance sheet that is both strong and resilient,” he added.
UK business declines
Standard Life said worldwide life and pensions sales were virtually flat at £12.4 billion in the nine months to September 30.
Strong growth in its international operations offset continued weakness in the UK, where life and pension sales of £9.8 billion were 5% below last year, the firm said.
During the third quarter – traditionally the weakest of the year even before the market chaos – life and pensions sales fell 14%.
The impact of share turmoil on pension pots across the UK was demonstrated by a £400 million fall in group pension funds under management so far this year to £14.6 billion – with strong growth in new business more than offset by tumbling share prices.
The firm’s savings and investment sales slid 29% between July and September as markets fell.
Standard Life said markets were likely to remain tough as the shockwaves of the crisis continue to reverberate.
“Conditions across all our markets remain difficult with the combination of weakening economic conditions and an unprecedented level of dislocation in financial markets.
“Retail investors are likely to remain cautious, preferring to allocate their funds to cash and lower risk assets,” it added.