IT’S tough out there, but for Sandy Crombie it could have been a lot worse.

After a week in which fear spread that insurers might need their own government bailout, the chief executive of Standard Life can afford a smile at his lucky escape.

In failing to acquire the zombie-fund group Resolution last year, Standard Life suffered a sweet defeat to rival Barclays’ failure to take over ABN Amro. Both have balance sheets that are all the stronger for it. At the half year, Standard Life reported a capital surplus of £3.5 billion, three times the size of Prudential’s. Goldman Sachs’s insurance team thinks it has changed little since then.

Standard Life’s position goes some way to explaining why its shares have been so resilient. In the past six weeks they have declined 20%, while Pru stock is off 48% and Aviva is down 54%.

Of course, Standard Life had its capital crisis four years ago, when concerns over its balance-sheet strength saw the Financial Services Authority (FSA) frogmarch it from mutuality to the stock market, dumping billions of pounds of equities along the way.

This time the FSA has toured British insurers saying they won’t be forced to sell equities to shore up their position.

However, it is impossible to think that Standard Life hasn’t lost heavily on investments recently. It was the biggest shareholder in Bradford & Bingley, for example.

Goldman Sachs is forecasting a 12% quarter-on-quarter decline in sales of self-invested pension plans when the company reveals new figures on Thursday. Market volatility is leading consumers to put off investment decisions.

Standard Life could have picked up more group pension mandates at the expense of Friends Provident, but this is low-margin business.

The company is trading on 99% of its enterprise value, making it one of the most expensive life insurers. It looks as though a British recession is yet to be priced in.

Pinewood Shepperton

SURVEYING the debris of the banking meltdown, Lord Mandelson rightly alighted on the creative industries as a driver for future economic growth.

Often regarded as a Cinderella sector, the likes of film, design and computer gaming have expanded at twice the rate of the wider economy for the past decade.

And while importers fret over the impact of the weaker pound, it could mean good news for the film industry in particular. For that, read movie-studio owner Pinewood Shepperton, whose out-of-favour mix of media and property operations has led to its share price declining 57% in a year.

Deloitte’s media director James Bates points out that the last time the pound was so low against the dollar, British film enjoyed a record year. Production spending hit £1.1 billion in 2003. It slid to £747m last year.

Of course, some of the decline was down to Gordon Brown’s dithering over the film tax regime, but it is impossible not to underestimate the foreign-exchange impact that made it much cheaper to shoot some movies in eastern Europe.

Pinewood, which trades on 14 times this year’s forecast earnings, has not been performing badly. An interim £3.8m profit in August beat forecasts and it has a new £70m bank facility. But it could do with a boost as profitable franchises like Harry Potter come to an end. Sterling’s weakness could provide it.

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