British life insurer Standard Life today reported weaker-than-expected nine-month sales, sending its shares lower, but said its capital position was strong despite the stock market slump.
Standard Life said its worldwide life and pensions sales amounted to £12.4 billion ($19.9 billion) in the nine months to September 30th, little changed from £12.3 billion in the same period last year.
That was below the £12.6 billion expected by analysts. By 9.17am, Standard Life shares were down 6.9 per cent at 185 pence, making them the second-biggest faller in the FTSE 100 share index.
"There was a slight miss against the consensus sales number. Standard Life has been one of the better performing UK life stocks," said Peter Eliot, insurance analyst at MF Global.
The Edinburgh-based insurer also reported a capital surplus of £3.4 billion at September 30th, compared to £3.5 billion three months earlier, and said its capital buffer would fall to £1.9 billion in the event of a 40 per cent fall in equity markets from their September 30th level.
"Our FGD surplus is still strong in the event of further market weakness," the company said in a statement.
The Financial Groups Directive, or Insurance Groups Directive, is an industry measure of capital adequacy which stipulates that insurers must hold a layer of capital over and above the minimum needed to meet their obligations to customers, plus a further buffer to absorb unexpected shocks.
In a conference call with reporters, David Nish said the company was comfortable with its capital position, and was not considering raising fresh funds.
He added that the company's surplus currently stood at about £3.3 billion, following a 20 percent fall in equity markets during October.
Life insurers' shares have fallen steeply this month on mounting concerns that falling equity and bond prices as the global economy slows could dent their capital reserves.