"We expected a lot of surrender activity after demutualisation because we reckon that about 30,000 people took out policies just to get free shares, " said Nigel Dunne, sales and marketing director in Dublin. "We've seen reasonably significant numbers cashing in since July but it's already started to slow down."

Because most of the cancelled policies are for small amounts, they will have little impact on Standard Life's overall business, according to Dunne. New business was up 64% to 14.7m in the first half of the year.

Some 94,000 Irish customers qualified for free shares, including 20,000 people who held minimum-value policies costing about 10 a month.

"This is not the type of business we're pursuing, " said Dunne. "Our focus is on the individual pension business where the premium is about 100- 150 a month."

Qualifying customers got at least 185 free shares when Standard Life listed on the London Stock Exchange. The share price has grown 11% since then, valuing the minimum windfall at about 700.

The company will make it more difficult to keep smallvalue policies from December by increasing the monthly policy fee on a wide range of pensions and savings products.

This is a flat charge so that, the smaller the premium, the greater the impact on the value of the policy.