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Standard Life UK profits down 5% despite income surge

Standard Life’s UK business has reported a 5 per cent drop in year on year pre-tax operating profit during 2013, from £351m to £335m, despite total income rising by £107m.

The provider’s annual results for 2013, published this morning, reveal total fee based revenue surged 9 per cent from £667m in 2012 to £727m last year.

The spread/risk margin, which measures the profitability of Standard Life’s annuity business, increased 44 per cent from £107m to £154m. The firm says this is due to changes in actuarial mortality assumptions rather than pricing.

Acquisition expenses were up 4 per cent, from £174m to £181m, while maintenance expenses increased 3 per cent from £356m to £368m.

In addition, the 2012 pre-tax profit figure was skewed by a £96m professional indemnity insurance claim made by the provider.

Profits from “new” retail products grew 48 per cent from £54m in 2012 to £80m in 2013, while profits from “old” retail products rose 5 per cent from £179m to £188m.

Standard Life’s corporate business delivered profits of £90m in 2013, up marginally from the £88m figure reported the previous year.

Assets on the insurer’s wrap platform increased 36 per cent from £12.2bn in 2012 to £16.6bn in 2013, with the number of firms using the platform rising from 1,137 to 1,236.

Standard Life chief executive David Nish says: “During 2013 we have continued to make good progress in each of our businesses.

“Growth in revenue reflects customer demand for our propositions, while continued work on controlling costs has enabled us to increase operating leverage, in turn driving an ongoing improvement in underlying performance.”

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