More than a million endowment customers of one of the UK's largest insurers are facing a shortfall, according to an industry expert.

Put simply, they have doubled their bets and chased stock market loses over the last year. Ned Cazalet

Standard Life is currently writing to its 1.5 million endowment customers outlining what their investment is likely to be worth at maturity.

The majority are expected to be told that their endowment is no longer on track to pay their mortgage.

Ned Cazalet, an insurance analyst, told BBC News Online that Standard Life's investment performance had underperformed its rivals in recent times.

Bets doubled

Back in 2000, when the last batch of projection letters were sent, one in two Standard Life's endowment customers faced a shortfall.

This time Mr Cazalet said that Standard Life's over-investment in a falling equity market meant more customers would be losers.

"Put simply, they have doubled their bets and chased stock market loses over the last year," he said.

"Doing the maths it is likely that far more investors will be facing a shortfall than back in 2000."

Rollercoaster

Standard Life spokesman admitted the firm had underperformed other life insurers by up to 4% during the last year.

"Its all part of riding the equity rollercoaster," he said.

"We traditionally invest between 10-15% more in shares than other insurers - this has served us well over the last ten years when we have been top performers."

Mr Douglas insisted that Standard Life was not about to change its strategy, adding that now was not the time to sell its shareholding.

He refused to deny that Standard Life may have to cut future bonus payouts to with profit customers.

Standard Life has cut bonus payouts in the past, and in September 2002 imposed an exit charge on its with-profit fund for the first time.