Resolution interim profits soar

by Gill Montia

Story link: Resolution interim profits soar

Resolution Plc, the specialist manager of in-force UK life funds, has recorded a strong rise in interim profit.

The insurer, which is in the process of merging with Friends Provident, recorded operating profit for the six months to the end of June at £395 million (on a European Embedded Value basis).

The result compares with £118 million for the same period of 2006 and reflects a first contribution from the insurance business recently acquired by Resolution from Abbey, the High Street bank.

The £3.6 billion takeover of the Abbey business was completed in September of last year.

Resolution is currently focused on completing its takeover of Friends Provident, despite the fact that Resolution’s largest shareholder, Pearl Group, may not support the move.

Pearl Group, which is privately owned, increased its interest in Resolution to 16.5% in July, since when it has suggested that the Friend merger is abandoned in favour of alternative opportunities, which are as yet unpublished.

Resolution will be producing documents on the Friends merger in early October and some insurance sector analysts expect Pearl to make a cash bid for Resolution after that. Any such bid could reach £5 billion.

Resolution Plc has an estimated seven million customers and combined life company invested assets of over £61 billion.