Resolution Announced Higher First Half Profits

by Stewart Douglas

Story link: Resolution Announced Higher First Half Profits

UK insurer Resolution announced today a significant increase in interim profits over the first half of the year, after strong performance from the former Abbey insurance operation which it acquired earlier in the year.

The insurance arm of the Abbey has been a strong performer for Resolution since it acquired the business, having a significant impact on the first half profit figures announced today, along with generally stronger business operations from the major insurer.

Resolution announced first half profits to the end of June at £395 million, standing at over 300% of the same figures last year, which came in at £118 million for the first half of 2006, hich was well reflected in its share price over the course of the day.

The move reflects an overall growth in the insurance operation, as well as strong performance from the recently acquired Abbey insurance operation for the value of £3.6 billion, which has proven to be a strong asset for the Resolution operation.

Resolution is currently involved in a merger with insurer Friends Provident, which it is looking to complete as soon as possible in order to further leverage its hold on the insurance market, and this has been described as the immediate focus for the shorterm.

Despite its attempts, major shareholder Pearl Group is strongly against the move, which is causing problems in terms of pushing the move through for both companies.

Their 16.5% stake has allowed a significant voice in favour of considering alternative options available for the medium term rather than moving to merge with rival Friends Provident.

There has also been some speculation of a potential takeover of Resolution by the Pearl Group, which if it were to go through would block the proposed creation of ‘Friends Financial’.