LONDON (Reuters) - Europe's largest mutual life insurer Standard Life (SL.UL: Quote, Profile, Research) said on Wednesday third-quarter insurance revenues fell 7 percent and it expected price competition to continue to hit sales of UK pensions.

The Edinburgh-based society, expected to list on the London Stock Exchange next year, said worldwide sales in the third quarter were 250 million pounds, compared with 268 million in the same period last year.

Sales in the UK fell 6 percent as stiff price competition in the group pensions and traditional pensions market overshadowed strong sales of Standard's new self-invested pension and good demand for investment products.

"The numbers are down, but they are where we expected them to be. We expect some lines of business to remain competitive, but we are well placed with our self-invested pension products to benefit from pension reforms next year," Finance Director Alison Reed told Reuters.

"There is weakness in a number of lines, but what we are seeing is strong growth for self-invested personal pensions. They are doing really well there," said Johnny Vo, analyst with Fox-Pitt, Kelton.

Standard Life, which is expected to enter the FTSE 100 index of shares next year with a value of between 4 billion and 6 billion pounds, has cut commissions to distributors and is turning away unprofitable business as it seeks to woo prospective investors.

Reed declined to say whether Standard Life would grow sales and UK market share next year, but CEO Sandy Crombie has previously said he expects to revive the society's market share in 2006.

Standard Life's share of the UK life and pensions market fell to 7.7 percent in the second quarter of 2005 from 9.6 percent in the first quarter.

Gross mortgage lending at its Standard Life Bank fell 28 percent in the third quarter to 848 million pounds as a slowdown in the housing market continued to bite.

Third party funds under management at Standard Life's fund arm rose by 3 billion pounds in the third quarter to 25.3 billion pounds compared with the preceding quarter. In total, Standard Life Investments manages 112.5 billion pounds of funds.

This is cache, read story here