A BULLISH Sandy Crombie yesterday hinted that he is set to remain at the helm of Scotland's largest insurer well into the future as he unveiled a stunning 43 per cent rise in operating profit to £881 million.
The Standard Life chief executive dismissed continued concerns over the Edinburgh-based company's "succession planning" as he revealed a 63 per cent rise in profit in the UK alone to £606m.
In a robust response to the critics who had failed to p
redict the insurer's strong performance, Crombie said that the life and pensions firm was "naturally bullish" despite current economic difficulties.
Yesterday's results prompted the shares to leap more sharply than they have since it went public almost two years ago, rocketing almost 14 per cent to 249.5p in early trading, before dropping back to end 12.9 per cent, or 28.25p, up at 247p.
But despite this, analysts raised questions over Standard Life's succession plans, complaining that questions had not been answered over the future leadership of the firm.
James Pearce, an analyst at JPMorgan Cazenove in London, said: "Much better-than-expected new-business profit coincided with some huge annuity reserve releases." But he added: "Questions on strategic direction and succession remain unanswered." However, Crombie, who has worked at the company for 41 years, said he had no plans to step down on his 60th birthday in a year's time.
He said: "I have very much enjoyed being part of Standard Life's success for a number of years and am looking forward to continuing being a part of Standard Life's success in the future."
The results – reporting on the company's first full year since demutualisation in July 2006 – revealed a 64 per cent rise in full-year net income to £465m from £283m in 2006.
And the figures also showed that a £249m hit from customers cashing in policies early amid the global credit crisis was partly offset by a strong performance in Canada, leaving the group lapse charge at £219m.
Crombie said: "We expect to outperform in the markets in which we play. We're naturally bullish."
Crombie added that he had no time scale in place for the replacement of head of UK business Trevor Matthews, who left earlier in the year, and was holding out to find the right person for the job. He said Matthews, who announced his departure for rival Friends Provident last month, was not likely to be replaced quickly.
He told The Scotsman: "There were certain conditions in the second half of last year where people who invest in property funds wanted to cash in their assets because of the markets.
"How that continues depends on what happens economically more generally, but once the markets settle down I would expect people to start reinvesting money in property funds."
He said the firm had shed a net total of around 350 jobs in 2007 but that growth had offset plans unveiled a year ago to cut £100m of costs by axing 1,000 jobs – adding no further redundancies were planned.
MIXED FORTUNESSINCE its flotation in July 2006, Standard Life has reported two strong sets of results but the firm has not been without its problems.
It suffered a setback last year when it failed in its £4.6 billion bid to acquire rival Resolution.
That fuelled a steady drop in shares which made it one of the worst performing stocks in the UK insurance sector over the past six months.
The departure of Trevor Matthews, announced last month, was another blow to the company.
Matthews, widely seen as a possible successor to Sandy Crombie, left to become chief executive of Friends Provident.
The full article contains 620 words and appears in The Scotsman newspaper.
