Standard Life boss sets scene for post-merger annuity book sale

Standard Life chief executive Keith Skeoch has revealed that he is ready to sell-off the Edinburgh insurance giant’s £16.1 billion annuity book once shareholders have rubber-stamped its mega merger with Aberdeen Asset Management.

According to reports, Mr Skeoch has said that he would be “quite happy to dispose” of the the asset if the deal was right for shareholders.

However, he ruled out selling off SL’s life and business in its entirety, a move raised by some analysts following the £11 billion merger with AAM, which is expected to result in about 800 job losses.

Shareholders will vote on the proposed merger in Edinburgh on Monday.

Mr Skeoch, who will run the renamed Standard Life Aberdeen as joint chief executive with AAM boss Martin Gilbert if investors approve the tie-up, told news outlet Reuters that the annuity business still made “reasonable profits” but that it was no longer growing because the company had stopped writing new business last year.

“It is the most capital-heavy part of our business, so I would be quite happy to dispose of that book of business if I can get benefit for shareholders,” said Skeoch, according to Reuters.

“However”, he added, “at this level of interest rates, the capital would tend to go with the book pricing is quite tight because there are quite a lot of books for sale.”

Speculation has already begun as to which of the limited number of annuity aggregators in the UK will look to pick up Standard Life’s business.

But the prospect is likely to be an attractive one, with specialist insurer Phoenix being the most obvious having been particularly active in the market in recent years.

The FTSE 250 firm bought Abbey Life’s £10bn portfolio from Deutsche Bank late last year. Earlier in 2016 it stumped up £610m to buy Sun Life’s £12.3bn annuity book from Axa.

Reports have cited these deals as evidence that a transaction with Standard Life would meet Phoenix’s acquisition criteria.

Other interested parties are likely to include Rothesay Life and the Pension Insurance Corporation.