March 12, 2009
Standard Life’s 2008 solid performance in Canada despite difficult market conditions
- Premiums and deposits rise 7% to $4.7 billion in 2008 compared to 2007
- Solid capital position maintained
- Net income falls to $3 million in 2008 due to challenging market conditions*
Montréal, March 12, 2009 – The Standard Life Assurance Company of Canada today reported that 2008 year-end results show strong sales growth and a resilient balance sheet. Premiums and deposits rose 7% to $4.7 billion in 2008 compared to $4.4 billion in 2007. The Company is part of the group Standard Life plc, which published its 2008 year-end results earlier today (LSE: SL.L). (Note: All figures are based on Canadian GAAP measures and are shown in Canadian dollars unless otherwise noted.)
“In Canada, Standard Life demonstrated continued resilience in the face of challenging market conditions in 2008,” said Joseph Iannicelli, President and Chief Executive Officer. “Despite the difficult economic environment, our financial results testify to our focus on growth in savings, retirement and insurance products, as well as to our commitment to operational and capital efficiency.”
Net inflows from clients increased eightfold to $665 million in 2008 compared to $84 million in 2007, while client retention remained high at 94.6% in 2008 compared to 95.7% in 2007. These two strong results improved the value of assets under administration, but were offset by the negative effects of turbulent capital markets. Assets under administration totalled $32 billion as at December 31, 2008 compared to $35 billion a year ago.
“Standard Life in Canada was able to maintain a strong solvency ratio without requiring additional capital from markets or the parent company, due to our prudent, conservative approach to investments and product design that proves even more appropriate in times like this,” said Joseph Iannicelli.
The Company maintained a Minimum Continuing Capital Surplus Ratio (“MCCSR”) of 198%, without any need to access additional capital. The MCCSR is well within regulatory requirements.
Net income was affected by the unprecedented market challenges and decreased from $204 million in 2007 to $3 million in 2008. This decrease was largely due to investment losses and other related charges resulting from the adverse market conditions in the second half. Unrealized losses on bond and equity investments of $124 million were fully reflected in the stated net income due to the accounting treatment the Company uses.*
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About Standard Life
With 10,000 employees globally, Standard Life plc is a major international financial services group headquartered in Scotland. It provides asset-managing services for retirement, investment and protection to some 7 million customers globally. It had C$278.3 billion in assets under administration, as at December 31, 2008. It has offices in the United Kingdom, Canada, Ireland, Germany, Austria, India, China and Hong Kong.
The Standard Life Assurance Company of Canada is Standard Life plc’s largest operation outside the U.K., with 2,000 employees based in Montreal and across Canada, serving more than 1.3 million Canadians, including group insurance and pension plan participants. (www.standardlife.ca)
Standard Life plc has approximately 1.5 million shareholders worldwide, including approximately 14,000 institutional and individual shareholders in Canada. It has been trading on the London Stock Exchange since The Standard Life Assurance Company demutualized in 2006. Standard Life plc is listed on the FTSE 100, Europe’s largest index, and on the FTSE4Good Index, which identifies companies adhering to globally recognized corporate responsibility standards. (www.standardlife.com)
Forward-looking statements
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.
* In order to be consistent with the standards used by its parent company, but unlike many Canadian life insurers, The Standard Life Assurance Company of Canada adopted the “held for trading” accounting treatment for equity and bond investments. Under this accounting treatment, unrealized losses on these investments are included in the stated net income. Had the Company used the standards chosen by many Canadian life insurers, the net income would have been higher by $124 million.
Note to editors:
You can access Standard Life plc 2008 year-end results from the Latest News section at www.standardlife.ca
Contact:
Ann-Marie Gagné
Manager, External Communications and Public Affairs
514-499-7999, ext. 4600
ann-marie.gagne@standardlife.ca
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