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Shares in Standard Life jumped 11% after full-year earnings beat market forecasts.

The UK's fifth-biggest insurer increased annual profit by 43%, helped by a one-off boost from a review of its annuity business and cost controls.

Operating profit for 2007 came in at £881 million, up from £614 million the previous year.

Analysts had expected a profit of £687 million.

The increase partly reflected tight cost controls, with expenses at Standard Life's corporate centre falling by £29 million to £57 million.

Standard Life is on track to hit its target of £100 million cost savings by the end of 2009.

Profit was aided by a £191 million boost after a review of its annuity business concluded that reserves set aside against some policies written in the 1970s and 1980s were 'overly prudent.'

That helped offset a £249 million charge to reflect UK customers surrendering
their policies early.

'Against an uncertain economic backdrop we have made a good start to 2008 and are working to improve our core profitability,' said chief executive Sandy Crombie.

In early afternoon trading, Standard Life's share price had gained 25p to 243.75p.