Standard Life Q1 sales up 8 percent

By Clara Ferreira-Marques

LONDON (Reuters) - Insurer Standard Life (SL.L) beat forecasts with an 8 percent rise in first-quarter sales on Wednesday, as growth in savings and investments and a large bulk contract offset weakness in some key pensions products at home.

Standard Life's total life and pensions sales for the quarter totalled 4.48 billion pounds, well above an average forecast of virtually flat sales at 4.08 billion pounds, according to 11 analysts polled by the company.

In its core UK market, life and pensions sales rose 6 percent to 3.52 billion pounds, again above forecasts.

The former mutual has been hit by customers cashing in policies early, but net inflows showed an improvement, with UK flows rising 42 percent to 826 million pounds.

Life insurers have so far posted lacklustre numbers for the quarter, hit by tax changes that have affected investment bond sales, weaker commercial property and equity markets and the waning effect of 2006 rule changes that boosted sales.

Standard Life, however, was buoyed by a 224 million pound scheme won by its UK group pensions business, which lifted sales there by 48 percent, and by investment bond deals, at lower margins, with two large institutions.

Sales of its key self-invested personal pensions (SIPP) products, however, were weaker than expected in the quarter, as the market eases after bumper 2006 and 2007 sales.

"Standard Life's SIPP driven top-line growth story appears to be over," Cazenove said in a research note.