Standard Life is to close its insurance operation in Singapore, which will lead to a £45m loss, just three years after it moved into the territory.
In a statement, the firm said it would no longer accept new insurance applications or contributions to existing plans in the Singaporean business, with immediate effect.
On moving into Singapore in 2012, Standard Life outlined plans to quadruple its Asian business by 2017. Although that is now not to be, Sandy Begbie, chief operations officer of the Edinburgh-based FTSE 100 company, said it remained committed to the Asian market.
The closure will be reported within discontinued operations in Standard Life’s half-year results on 4 August, alongside its gain on the sale of the Canadian operations of approximately £1.1bn.
Mr Begbie said that following discussions with the regulators, it had contacted all customers in Singapore to offer them a closure value, including an enhancement paid into their plans.
The closure value will be the higher of the total of all contributions received by the firm and any bonus allocation, plus an 8 per cent enhancement paid into the plan, or plan value plus an 8 per cent enhancement paid into the plan.
The news came just days after chief executive David Nish announced he was leaving after six years at the helm. A Standard Life spokesman confirmed the company was taking a new direction which “had investment management at the heart of the business”.
When asked whether this was the reason for Mr Nish leaving, the spokesman refused to comment on speculation.
Over the past 12 months, Standard Life bought Ignis Asset Management for £390m and disposed of its Canadian business for £2.2bn, which had been the traditional training ground for senior executives.
Alex Reynolds, financial adviser at London-based Advies Private Clients, said: “It is a surprising move; perhaps Standard Life has lost its way slightly. A few years ago it had a bank, then it sold its Canadian business and today it has a platform that is not capturing the imagination of IFAs.”
Eamonn Flanagan, senior analyst at Liverpool-based Shore Capital, said that Standard Life leaving Singapore “is not that a big a deal. The company is a shrewd player and knows what it is doing. It most likely made a commercial decision. It could be that Singapore was a loss leader or that it interfered with Standard Life’s Manulife agreement. [On 2 February, Manulife completed its purchase of Standard Life’s Canadian-based operations]. However, Asia is a hotspot and a strong market, so Standard Life could have leveraged off having such infrastructure in the region.”