S&P revises Standard Life outlook to negative, affirms ratings

London:
30 May 2003

London: Standard & Poor's (S&P) Ratings Services has revised its outlook on the UK-based life assurer, Standard Life Assurance Company, to negative from stable. At the same time S&P affirmed its ratings on the group, including its AA/A-1+ ratings on Standard Life and its A+/A-1.

"The outlook revision reflects S&P's concerns that its expectations for Standard Life's operating performance may not be met," says credit analyst Manish Bakhda. Nevertheless, the ratings on Standard Life continue to reflect its superior business position and above-average capitalisation.

In a concentrating market, Standard Life's leading position in the UK life and pensions market is demonstrated by its share of 13.5 per cent of the total UK market and more than 18 per cent of the independent financial adviser market.

This position is supported by Standard Life's award-winning, high-quality service standards and very strong financial strength. After the recent bonus cuts, Standard Life's maturity payouts will still compare favourably with the majority of competing life offices and other investment schemes held over a comparative time horizon.

Standard Life's above-average capital strength has enabled it to continue to maintain a more aggressive investment policy for the benefit of its with-profits policyholders and to support its new business growth. The waivers granted by the Financial Services Authority in 2003 will improve Standard Life's published solvency position and better reflect the underlying, realistic position.