Edinburgh-based insurance company Standard Life is to cut 1,000 jobs from its UK operations, despite announcing a 55 per cent rise in profits yesterday.
In its first full-year results since it demutualised last summer, the insurer said it made pretax profits of £614 million (€905 million) in 2006, up from £395 million the previous year. The results were ahead of market expectations.
The job cuts will not affect Standard Life's Irish operation, which is no longer publishing a separate set of results because of new reporting methods adopted since Standard Life became a public limited company.
The performance of the Irish operation and Standard Life's business in Germany were reported together yesterday as the company's European businesses, with pretax operating profits falling 15 per cent to £45 million last year.
The company said the loss reflected further investment in product development in both countries.
It is understood that the Irish operation returned a profit last year, but this was more than offset by losses at the German business.
Earlier this year, Standard Life Ireland said sales at the company rose 35 per cent last year to €64.5 million as a result of a new range of self-directed pensions and single-premium investment products.
The group, which has already cut about 4,000 jobs since a stock-market downturn earlier in the decade, said it aimed to slash costs by £100 million per year by the end of 2009.
The group said it would cut its UK headcount of 8,500 by about 12 per cent. Compulsory redundancies would be kept to a minimum, chief executive Sandy Crombie said.
Provisions for policyholders cashing in early have been a major concern for Standard Life, but the former mutual said the trend was improving.
- (Additional reporting: Reuters)
