Standard Life has taken a £100m hit to its first half profits due to customers leaving the financial services company after its demutualisation in July.
It reported that operating profits fell below analyst forecasts to £206m in its first half-year results to June 30. It is Standard Life’s first set of results as a public company.
The financial services company says it experienced an increase in customers allowing their with-profits policies to lapse in the aftermath of the demutalisation, combined with a jump in customers cashing in their policies.
Although it claims that this trend has reversed since early August, Standard Life has increased its provision for lapsed customers by £21m to £44m before tax.
It also accounts for an increase in pension lapses due to customers consolidating their pension arrangements as a result of major changes to pension market regulations – the A-Day overhaul.
The news came as the company, which floated on the London Stock Exchange in July, reported a near threefold increase in new insurance business to £91m for the six months to the end of June.
The company, which did not report half-year figures for the previous year when it was under mutual ownership, also revealed worldwide insurance sales of nearly £5.8bn, and adds it is making “good progress” in the rapidly changing insurance market.
Sir Brian Stewart, chairman of Standard Life, says: “Our share of the UK life and pensions market rose in the first half and profits improved.”