STANDARD Life is gearing up for an influx of 400,000 pensions customers as it positions itself for major market change.
Chief executive David Nish yesterday sought to convince investors and analysts that it was right to focus on building its UK savings and investments business, which currently contributes 40% of group profits.
Many rival insurance companies are eyeing up opportunities further afield in fast-growing regions such as Asia. Some, such as Prudential, have stepped up dividend payments while Standard Life is investing around £200 million a year in its business.
At the heart of Standard Life’s pitch at its investor day yesterday was the opportunity open to the company through major changes such as auto-enrolment, which will require all UK employers to automatically place workers over the age of 22 in a staff pension scheme, from 2012.
The Edinburgh-based insurer already has 1.1 million corporate pension scheme customers through 35,000 schemes.
Mr Nish said current take-up was around 55% and that after auto-enrolment Standard Life expected to attract 400,000 new savers, while others would go into schemes such as the Government’s National Employment Savings Trust.
He said: “What we are doing is deliberately aligning with what the market is doing. There is a huge amount of money that is going to be moved in the next three to five years.”
Standard Life currently has a 21% share of the corporate pensions market.
The company’s management team said it will do more work tracking customers. It is particularly keen to attract the 25,000 people who leave Standard Life-run schemes every year into its retail business.
It hopes that innovations such as allowing investors to view their pensions accounts online will mean they will become more actively involved in managing their savings.
Mr Nish dismissed fears that Britain’s stalling economic recovery could get in the way of its plans: “It has bigger consequences for the economy if we do not have a savings culture.”
Duncan Russell, analyst at JP Morgan Cazenove, said: “The group is well placed for the changes taking place in the UK.”
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