British life insurer Standard Life has reported a 35% drop in its half-year profit, blaming weaker sales and falling asset values.
Standard Life said its sales fell 17% in the first half of 2009, reflecting a decline in the value of new customers' pension funds, as well as its decision to withdraw from less profitable product lines.
But the UK's fourth-biggest life insurer said it remained financially robust, with a regulatory capital buffer of £3.1 billion as of June 30.
Standard Life Ireland said it recorded 4% growth in new business in the first-half. The group said domestic sales were up 8%, with strong growth in sales in retirement products in recent months. Standard Life said this was due to fears that the next Budget would contain measures on the tax treatment of pensions.
'The recession has had an inevitable impact on our performance in the first half of 2009,' Standard Life chief executive Sandy Crombie said in a statement.
European insurance stocks fell sharply in March on concerns that rising corporate bond defaults could erode their capital, potentially triggering rights issues. But Standard Life has escaped the worst of the sell-off as it holds fewer corporate bonds than rivals.
Standard Life had a European Embedded Value pre-tax operating profit of £348m for the six months to June 30, down from £534m in the same period last year.
