Post-merger, Resolution is eyeing acquisitions

Post-merger, Resolution is eyeing acquisitions

	Published : Thu, 22 Sep 2005 06:05 By : David Simms Print this Story

LONDON: British life insurance company Resolution, which had consolidated its position earlier this month after merging with Britannic, is eyeing major acquisitions, which may happen early 2006. The company claimed its has more than 1 billion pounds at its disposal for this purpose.

The company, which doubled in size after the 1.8 billion-pound merger and became the biggest operator in closed life funds with a market value of 2.3 billion pounds, said with the integration now complete, it should look at bigger deals.

The company's chief executive Paul Thompson said the company is well positioned to to contemplate significant, complex acquisitions from the first quarter. He said there was a handful of possible big closed life fund operators as targets. The company may raise money in the capital markets for any significant acquisition. Analysts speculate the targets could be Scottish Mutual and Scottish Provident, the closed life funds controlled by Abbey.

The company said it expects to have a saving of 30 million pounds per year by 2007 from its merger with Britannic and its efforts to bring in its outsourced assets. Resolution and other similar companies have been buying closed life funds in recent years with a view to using scale to cut the cost of running the funds.

Resolution has about 6 million policies and 35 billion pounds of life company assets.

The company reported 1.8 per cent rise in the embedded value per share -- a key determinant of life insurer's performance -- to 5.81 pounds. It had a 77 per cent rise in pre-tax profits for the half to 47 million pounds at Britannic and operating profits of 48 million pounds at Resolution. The fund management unit of Britannic posted a 25 per cent rise in profits and the life business 21.4 per cent.

The company is yet to settle on a brand name for Glasgow-based Britannic Asset Management. Thompson indicated it may chose Resolution Asset Management, or pick a new third party name.