The analysts also say Standard Life’s sales this year could suffer as a result of tax changes and regulation putting pressure on its single premium pensions business.
KBW says Standard Life’s stock looks “uniquely” expensive compared to other life companies and are comparable to non-life players that have cleaner balance sheets.
The analysts’ views come ahead of the insurers first quarter sales figures due to be published tomorrow.
KBW expects the insurer’s Q1 sales to be down 21 per cent year on year at £3.52bn, although it says the consensus is for sales to be £3.36bn.
KBW says the firm’s investment league table performance has slipped which could hurt sales.
The analysts say Standard Life’s management is optimistic over sales figures and that large defined benefit schemes looking at its group Sipp.
But KBW warns that the economic conditions will hurt increments on existing schemes and “that some fallout from the recent sterling fund controversy” could potentially hurt sales volumes.
KBW says: “We see tax changes, new regulatory oversight, pressure on disposable income and weak equity markets materially hurting sales in the group’s dominant business line – single premium pensions – in 2009.”