Note: All figures are based on IFRS and are shown in Canadian dollars. All comparisons are with the corresponding period of 2011, unless otherwise stated.
MONTREAL, Oct. 31, 2012 /CNW Telbec/ - Standard Life Financial Inc. ("Standard Life") today reported that premiums and deposits reached $1.6 billion in the third quarter of 2012 (2011: $1.2 billion). The strong performance was largely driven by the insurance subsidiary's group savings and retirement business which grew by 56%.
Assets under administration were 12% higher at $44 billion at the end of the third quarter (2011: $40 billion), mainly due to positive net flows and market appreciation. This represents an increase of $3 billion since the end of 2011 (December 31, 2011: $41 billion).
Charles Guay, President, said "We've performed well. We focus our expertise on opportunities in long-term savings and investments and it's paying off. We're seeing a strong momentum in the pipeline of new pension business coming in. On the retail side, we are gaining ground with the fastest growing segregated funds offering in Canada."
"During the quarter we also announced our first Canadian dollar debt issuance raising C$400 million. The heavily over-subscribed order book for this was a powerful signal of investors' confidence in our financial strength and our strategy." added Mr. Guay.
Growth in all three business segments
Premiums and deposits from the group savings and retirement business amounted to $984 million (2011: $630 million). The core business segment of defined contribution plans experienced premium and deposit growth of 13% to $565 million (2011:$499 million). A single large mandate was the other significant contributor to third quarter growth.
The business from group insurance and disability management activities grew 4% to $180 million (2011: $174 million). An 8% increase in disability management premiums was the main driver of segment growth.
Premiums and deposits for retail savings and retirement solutions were up 7% to $358 million (2011: $336 million). The growth was driven by strong mutual fund sales, which grew 31% to $99 million (2011: $76 million), and the continued success of Standard Life's traditional retail segregated funds, which grew by 12% to $191 million (2011: $170 million). Positive mutual fund results were a direct result of better fund performance in fixed income and yield-oriented products, and initiatives to better promote funds.
Successful subordinated debenture issue
In September, the insurance subsidiary raised $400 million in its first subordinated debt offering in Canada, by way of a private placement. The proceeds from the debt issuance will initially be held in Canada for general corporate purposes and, subject to local regulatory approval, may be used to repay, in whole or in part, existing internal subordinated debt to Standard Life plc.
Solid capital position
The insurance subsidiary reported a solvency ratio of 261% at the end of September (December 2011: 204%). The increase is mainly attributable to the $400 million subordinated debt issue. Any repayment of internal debt to Standard Life plc would lower the solvency ratio.
The low interest rate environment and uncertain financial markets in Canada present some challenges. The outlook for the Canadian economy however remains steady and Standard Life is confident in its growth prospects for the rest of 2012. The company will continue focussing on three core business segments:
- Group defined contribution retirement plans
- Retail investment funds
- Disability prevention and management services for employers
This press release may contain forward-looking statements about certain of Standard Life's current plans, goals and expectations relating to future financial conditions, performance, results, strategy and objectives. Statements containing the words: 'believes', 'intends', 'expects', 'plans', 'seeks' and 'anticipates' and any other words of similar meaning are forward-looking. All forward-looking statements involve risk and uncertainty because they relate to future events and circumstances beyond Standard Life's control. As a result, Standard Life's actual financial condition, performance and results may differ materially from the plans, goals and expectations set out in the forward-looking statements. The company will not undertake any obligation to update any of the forward-looking statements in this press release or any other forward-looking statements that it may make.
Notes to Editors
- Total premiums and deposits reported in Q3 of 2012 include those generated by individual life insurance products sold prior to 2012. The Standard Life Assurance of Canada stopped selling individual life insurance and critical illness products in 2012, but continues to service the in-force block of business.
- Premiums and deposits is a non-IFRS measure. Standard Life includes in its calculation deposits from segregated and mutual funds, and premium equivalents of administrative services only (ASO).
- As per UK securities regulations, Standard Life plc issues trading results and interim management statements for the 3 months ending March 31, and the 9 months ending September 30. It reports full results for the 6 months ending June 30, and the 12 months ending December 31. Standard Life Financial Inc. follows the same schedule.
- In July 2012, Standard & Poor's reaffirmed the financial strength ratings of Standard Life's main operating company in Canada at 'A+.
- Standard Life plc (LSE: SL.L) 2012 Q3 results published earlier today are available online.
About Standard Life
Standard Life plc is a leading long-term savings and investment company headquartered in Edinburgh, Scotland. Standard Life has around 6 million customers worldwide and operates in the United Kingdom, Europe, North America and Asia Pacific, and globally with Standard Life Investments Ltd.
In Canada, Standard Life has been doing business for almost 180 years. Standard Life Financial Inc., which wholly owns The Standard Life Assurance Company of Canada and Standard Life Mutual Funds Ltd., is Standard Life plc's largest operation outside the UK. With about 2,000 employees, it provides long-term savings, investment and insurance solutions to more than 1.4 million Canadians, including group benefit and retirement plan members.
As of September 30, 2012, Standard Life plc had $337 billion in assets under administration, including $44 billion in Canada through Standard Life Financial Inc.
SOURCE: STANDARD LIFE
For further information:
Mélanie Tardif, CPA, CMA
514-499-7999, ext. 8150, or 1-877-499-9555, ext. 8150