24 Jun 2010
Friends Provident CEO on potential acquisition

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Transcript excerpt:

There's been a good deal of speculation in the press, certainly over the last few weeks, about this latest stage in Resolution's growth, but what exactly is it that you're announcing today?

Well we're announcing a number of things; first of all that Resolution is acquiring the bulk of AXA UK's Life and Pensions business. Secondly, that we are going to integrate that business with the existing Friends Provident operation. And by doing that we'll be creating a business of market-leading size in the two key areas of protection and corporate pensions. On top of all that we are announcing the launch of the new Friends Life brand.

But what exactly is the thinking behind this strategic move? What is that strategy?

Well this is a logical next step in the Resolution strategy to act as a catalyst for consolidation in the Life and Pensions market here in the UK, so it makes a lot of sense from that point of view.

But Trevor you're going to be running the enlarged entity, so what's it going to mean for the Friends Provident business?

Well, it's interesting that the businesses are quite complementary. They've got some very good in-force business, and they've also got good strength in protection, which is a key area of focus for us at Friends Provident, and also in the pensions space.

But Resolution is only buying certain parts of the AXA business why is that?

Well we are buying the parts that we think make the most sense, and that will fit very well together in the new combined entity.

And in terms of this combined entity what kind of commitment can you give in terms of the service levels that people can expect?

Well I think Friends Provident has a fantastic track record and a very powerful reputation for providing very good levels of service, and we are absolutely going to continue to do that, there's no doubt about that whatsoever. So I think that people can look forward to continuing good levels of service from the combined entity.

But what about customer's policies, and also very importantly the returns that they'll get on those policies?

The returns on policies of course will be impacted by whatever happens in the marketplace. What I can say is that customers will not be disadvantaged in any way whatsoever. There are all sorts of protections in place, there's a 'with profits' committee, there's the 'Treating customers fairly' regime, so customers can look forward to actually being part of a bigger and a stronger organisation.

And they're dealing with which bit of the entity?

Well initially they'll continue dealing with either AXA or Friends Provident, but once we get through to start the integration it will all be under the new brand of Friends Life.

But why should IFAs continue to support Friends Provident? And who should they give business to during this integration?

They should continue as they are. What this shows this is a very strong demonstration that this theory of consolidation is actually working, and I think it really singles Friends Provident out as a winner in this game going forward. So IFAs and other distributors can look forward to getting richer and better propositions from us as we go further forward.

But what about the corporate platform that you announced? Is that still going ahead?

Oh absolutely, definitely yes. This is a very exciting development I think, not just for our new enlarged group but for the whole industry. We've successfully launched the first stage of our corporate platform earlier this year, and we are on track to launch a wider array of options later in the year and continue to enhance that going forward. I think we are going to act as a bit of a fulcrum here for changing the way that workplaces work and savings in the workplace. It's a very exciting development.

And what's the impact going to be on your financial strength?

Very strong. The existing company is strong; the company we are taking over is strong. All together you'll have a very strong financial company.

But to be absolutely clear, does this signal any change in your strategy?

No, no this is putting the strategy into action, and I think that's why people are very pleased to see this announcement.

Do you think this consolidation that you're announcing today is a sign of things to come within the UK?

Yes I think the UK Life and Pensions market has been crying out for consolidation for some time, and this is the first step in this new wave of consolidation.

But just to make it absolutely clear, can you confirm now that you will remain open to new business after the integration?

Oh yes. This is all about building a scale operation that is open to new business. That's what this is about, both here and overseas - we have a thriving international business as well. So absolutely, definitely yes.

Okay. And what happens next then?

Well we are looking forward to getting on with the integration, welcoming all our new colleagues into the enlarged organisation and then at the beginning of next year, 2011, launching the new brand Friends Life.

Well good luck. Thanks very much.

Thank you.

full transcript»

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Friends Provident potential acquisition of the majority of AXA's UK life assurance businesses by Resolution Ltd.

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