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6: Standard Life's Life and Pensions Division

In March 2007 Standard had announced plans to further reduce
underlying costs by £100m per year by 2009 (Appendix 7).
Through efficiency and productivity a reduction in underlying
headcount requirement to service existing levels of business by
around 1,000 by 2009 could be achieved.

This reduction in headcount came as the insurer laid out a series
of new initiatives designed to improve efficiency and profits,
including the setting up of a new "retail division" to be run by
Trevor Matthews. Matthews would be responsible for Standard Life
Bank and Standard Life Healthcare on top of running the life and
pensions arm and overseeing the cost cutting through the
elimination of overlaps and job duplications. It was expected that
growth and natural turnover would keep involuntary job losses to a
minimum.

These efficiency targets, came as Standard Life had unveiled a
strong set of profits boosted by record-breaking new business, and
came on top of previously disclosed plans to cut £30m out of UK
Life and Pensions expenses by the end of 2007 and to reduce
Group Corporate Centre costs to 2005 levels representing a
reduction of £31m. In addition, Standard Life had worked hard to

stem policy lapses (customers cashing in policies).

“Our lapse experience peaked in the month of October
(2007) and we've seen a steady decline since then.
There has been a change in the underlying dynamic of
the market. It makes sense for people to consolidate
their pension pot.”
Trevor Matthews
Source: Times Online
(22/03/2007)

A month after the announced job cuts criticism emerged after it
was revealed that three of Standard Life's top executives were
awarded more than £5m in pay.

• Sandy Crombie, received £2.2m, a rise of £871,000 on
2005.