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Will other mutuals follow Standard Life?

Europe&#39s largest mutual insurer Standard Life announced its proposal to demutualise earlier this month.

The proposal will be put to its two million members at the annual general meeting in 2006. The insurer, currently in the middle of a business review, has also announced it is to cut 1,000 jobs by the end of 2004 to keep a lid on costs.

Group chief executive Sandy Crombie says Standard Life is currently assessing the requirements for demutualisation.

So, Mortgage Strategy asks: Will Standard Life&#39s proposal to demutualise encourage building societies to follow suit?

John Stewart, PMI Independent Financial Advisers

It is likely to be down to technical reasons that Standard Life is thinking about demutualising as insurers have to present their accounts in a different way to lenders. Other insurers might follow suit but not lenders as they are accountable in other ways.

Paul Banfield, Best Advice Financial Planning

This will definitely encourage mutual societies to re-evaluate their stance. Standard Life is a big society that initially dug its heels in. Having now said it wants to go public and demutualise means that the door is open for the rest of the societies to bolt.

Frank Hadley, Oak Financial Management

Standard Life is not a stalwart of mutuality so I don&#39t think other societies will see its proposal as a trigger to demutualise as well. The members&#39 vote will probably be against the proposal anyway.

Ruth Whitehead, Ruth Whitehead Associates

Having previously been adamant that it would never demutualise, Standard Life has managed to do a complete turnaround. The fact that Europe&#39s largest mutual is considering demutualisation will definitely have big implications for every other mutual society.

Stuart Wilson, Inter-Alliance

Yes, I think this will encourage other mutuals to follow suit. The feeling is – what hope is there for other societies to stay mutual if Standard Life is going down the demutualisation route? It&#39s all to do with consolidation and societies are reviewing if they can keep up the costs of remaining as a mutual entity.

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