Policyholders criticise Standard

Standard Life will push the flotation plan at its annual meeting

Standard Life policyholders opposed to the company's decision to bring to an end its mutual status have been making their feelings known at the firm's AGM.

The company announced the plans last week as part of a wider reorganisation that includes 1,000 job cuts.

Members wanted to know why Standard Life has changed its mind on demutualisation, after spending years defending itself from carpetbaggers.

Standard needs the support of 75% of its 2.6 million members to demutualise.

It has been putting its case to policyholders at its annual meeting in Edinburgh on Tuesday and the issue will go to the vote in 2006.

Anger

Yet some members arriving at the meeting expressed concern at the actions of the board, with many saying they did not like the way the company was being run.

It would have been far better for the company and its policyholders if they had demutualised from a position of strength four years ago Fred Woollard

Douglas Forbes, a retired money manager who has held a Standard Life policy for 30 years, said: "I'm in favour of getting rid of the board. The mutual system works , but not when you've got people like this in charge."

Chief executive Sandy Crombie was attending his first annual general meeting (AGM) since being appointed after the surprise departure of predecessor Iain Lumsden.

There was anger at the meeting over the size of Mr Crombie's pay package. He has been awarded £743,000 a year ($1.4m) in salary and bonuses. Mr Lumsden had been receiving £615,000.

The demutualisation issue is another challenge for Mr Crombie. "We've got to explain why the announcement from last week was appropriate," he told reporters before going into the meeting.

Windfall question

Some Standard Life policyholders were no doubt keen to find out the size of the windfalls they can expect if the company does list on the stock market or is sold to another institution.

Standard has not yet indicated how much policyholders can expect, but commentators reckon they could be in line for average windfalls of between £1,000 and £3,000.

But only those policyholders who took out a with-profits policy before March 31 will be eligible, even those who previously signed a waiver preventing them from picking up a payment.

Fred Woollard led a campaign to demutualise the company four years ago and is angry about the delay in making the move.

He told BBC Radio 4's Today programme: "It would have been far better for the company and its policyholders if they had demutualised from a position of strength four years ago, rather than waiting until financial weakness forced the issue on them.

"Four years ago, when I was advocating demutualisation, the average windfall would have been around £6,000. Today, it will be £1,500, maybe £2,000 if you are lucky."

One young Edinburgh policyholder said: "Sorry seems to be the hardest word", referring to the U-turn on demutualisation.

The challenge over the next two years, the board told the BBC, is to rebuild the trust of policyholders.