Standard Life's new chief executive, Keith Skeoch, has assured investors that the company will remain active in insurance and asset management, despite income from asset management products representing 95% of its total profits in the first half of 2015.
"We are and will remain both," he said. "Our strategy puts investments at the heart of what we do."
In the firm's half-year results presentation, Skeoch said there had been some speculation about whether Standard Life was an insurer or investment manager. His elevation to CEO, replacing David Nish -- which takes effect today -- was previously cited as evidence of the firm's transition to an asset manager (see IERM, 19 June).
Operating profits from fee-based business reached £761m ($1.19bn) in the first half of 2015, compared with the £40m earned from spread/risk margin business – essentially the margin on its UK annuities book.
Two years ago, the fee-based business represented 75% of operating profit, compared with 95% today, said chief financial officer Luke Savage.
The spread/risk margin profits were down around 50% on the same period last year. "This included the expected £26m reduction in the benefit from asset and liability management, as fewer opportunities for more effective management of our assets exist in the current low-yield environment. This was accompanied by a reduction in the new business margin by £9m to £4m, caused by a 66% reduction in annuity sales as a result of the 2014 [UK government] budget changes," the company noted.