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7: The future

Crombie acknowledged that investors' confidence in Standard Life
had been knocked by the Resolution episode, but he tempered this
by saying,

“Conviction was shaken when we took a look at
Resolution. But I don't lack confidence. We're at the
stage of delivering results.”

and insisting that his recovery plan was still on track. New
business results for the twelve months to 31 December,
announced on 30 January, recorded worldwide life and pensions
sales up 12%, UK life and pensions sales up 15% and an
expectation that all financial and efficiency targets for 2007 would
be achieved.

Standard Life Investments produced a strong performance with a
39% rise in net inflows to £6.36bn. A near 20% rise in external
funds for the first half of the year was achieved, followed by a
record third quarter for mutual fund sales to retail investors.

The key to this was strong investment performance, with 18 of
SLI's 23 pooled pension funds beating the median in the first half

of 2007 whilst over 12 months, 21 of its 23 mutual funds beat the
average, with 17 funds in the top quartile and 10 in the top decile.
He had now built SLI to almost £48bn of third-party or external
assets, a third of the total £143bn.

In February 2008 David Nish, Group Finance Director of Standard
Life plc, announced that Standard Life had reinsured £6.7bn,
representing more than half of its £12bn annuity book, of its UK
immediate annuity liabilities to Canada Life International Re. These
were largely people, some 300,000, who had invested in a
Standard Life pension policy before it demutualised and had taken
out an annuity with the company on retirement.

These people continued to be customers of Standard Life, the
company that they had chosen as their pension provider, but the
longevity risk – the financial consequences associated with the
possibility that these people would live longer than expected – had
been transferred to a third party. This risk would otherwise have
been borne by Standard Life’s shareholders.