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End of an era as Clive Cowdery quits his Resolution

Jamie Dunkley
Wednesday 19 March 2014 01:00 GMT
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Resolution marked the end of a three-year restructuring programme yesterday with plans to change its name and part ways with founder Clive Cowdery.

The FTSE 100 company, which was set up in 2008 to consolidate the life insurance industry, said it will ask shareholders for permission to switch from Resolution to Friends Life when it holds its annual meeting in May.

It also revealed that Mr Cowdery and co-founder John Tiner will not stand for re-election as non-executive directors, effectively ending their direct association with the company.

Mr Cowdery, who oversaw deals for Friends Provident in 2009 as well as parts of Axa and Bupa a year later, is currently working on a new project to consolidate the US life industry and snapped up Lincoln Benefit Life for $600m (£361m) last year.

In a statement, he said: "Resolution has delivered on its targets, with further upside as the company continues to seek to secure maximum value from each part of the group."

Yesterday's news marked the end of an eventful few years at the group, which had been criticised by investors and regulators for using an offshore company, led by Mr Cowdery, to run key management functions.

This arrangement was ended in late 2012, and chief executive Andy Briggs and his team have since taken out £160m in costs from the company, which saw operating profits rise 59 per cent to £436m last year.

"We reached a significant turning point for the group in 2013 and are entering a new and exciting chapter," Mr Briggs said. "We operate in attractive growth markets, focused on managing legacy life and pension products, and capturing value in the fast-growing retirement provision market."

Overall, the value of new business rose 5 per cent to £204m, 30 per cent coming from the UK where it operates the Friends Life brand. Despite this, shares in the company fell heavily, closing down 22.1p at 351p.

Resolution said it also remained in talks to sell Lombard, its European wealth manager, and had also ended an agreement with F&C Asset Management to handle £14.5bn on its behalf.

F&C, which is currently in the process of being sold to the Bank of Montreal for £708m, lost the bulk of the mandate to rival Schroders, although £2.3bn will now be invested by Resolution's own Friends Life Investments. The news will come as a blow to those F&C shareholders – such as Standard Life Investments – who believe BoM should increase its bid.

Reflecting on Resolution's results, Eamonn Flanagan, an analyst at Shore Capital, said: "The issue for the group is that it now looks like any other open life company in the sector.

"We remain unconvinced that its new business offering is yet up to the standard of many of its peers."

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