Standard Life share prices increased slightly this morning, following its announcement yesterday that its profit for 2008 was higher than expected.

The insurance group posted profits of £933million yesterday, up six per cent from the £881million made by the group in 2007. The announcement comes despite its decision to refund money lost by customers invested in its Pension Sterling Fund after it was revealed it fell five per cent despite being labelled as low risk.

According to the group, it owes its strong profit announcement to its decision to make cost savings of £100million, while it still aims to cut a further £75million.

Commenting, Standard Life chief executive Sir Sandy Cromnie said: “Our capital position is among the strongest in the industry and is relatively resilient in the event of further deterioration in market conditions.”

Advice from The Share Centre to Standard Life shareholders with a long term view is to hold, despite a fall in value of 40 per cent since the credit crunch began.

Meanwhile, those with a short term view “should consider their position as we expect there to be plenty of volatility in the sector,” said Nick Rayner, adviser at the Share Centre.

According to Mr Rayner, “Analysts were hoping today’s figures would add some stability to the sector, however a downgrade for Aviva from Citigroup has taken away any of the gloss there may have been in the results.”

Nevertheless, Standard Life is optimistic, saying: “While market conditions mean that the outlook for retail savings is likely to remain subdued, we continue to see opportunities in the profitable markets in which we operate, including group pensions and fixed income investment mandates.”

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