Standard Life PLC's (LSE:SL.) growth opportunities in its retail business are becoming a key focus following the acquisition of Aegon UK, according to analysts at RBC Capital Markets.
After a call with chief executive Andy Briggs, RBC said the life insurance boss highlighted the potential to cross-sell investment products through Cofunds, the adviser platform acquired as part of the £2 billion Aegon UK deal.
The broker said Standard Life now has operations across the three main UK retirement markets of pension risk transfer (PRT), workplace pensions and retail savings, with management now concentrating on strengthening its retail offering.
RBC said Briggs viewed revenue synergies as more important than cost savings from the Aegon transaction, adding that no significant value had been assigned to Cofunds in the acquisition price.
In pension risk transfer, Briggs said competition from newer entrants had increased but argued that “price rationality will prevail” because Standard Life has multiple business lines and does not need to write low-return business.
The chief executive also said the group could partner with alternative capital providers to target larger pension scheme transactions, noting that around half of UK defined benefit pension assets are in schemes worth more than £2 billion.
Looking ahead to Standard Life’s fourth-quarter strategy update, RBC said investors should not expect major changes in direction but management could provide more detail on capital allocation, including potential share buybacks, higher dividends and growth in annuities.