Resolution set to acquire Bupa Health Assurance
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Resolution has announced plans to acquire Bupa Health Assurance.
BHA is to be bought by Resolution subsidiary Friends Provident Holdings for an initial sum of £165.15m.
The purchase is the be funded out of cash held by Friends Provident but following the completion of the deal, Resolution expects £86m of reserves held by Bupa to be released immediately to offset the cost of the purchase. After tax this will mean £63m will be returned to Friends Provident and make the net purchase cost £102m.
As at December 31, 2009, Bupa had assets worth £309m.
Resolution says it expects to release a further £22m of capital following the transfer of the Bupa business in 2011.
The Bupa business will be run as a stand alone business with Friends Provident Holdings for up to a year but the Friends Provident group risk business will eventually be integrated into the Bupa business, while the individual protection products will be integrated on a ‘best of breed’ basis.
Resolution says it expects the integration of the businesses to cost £3m.
Friends chief executive officer Trevor Matthews says: “This acquisition will strengthen our Group Risk business product range and improve the profitability of our Individual Protection business. The BHA management team led by Steve Payne will bring additional highly valued expertise to the Friends team.
“The acquisition is subject to the approval of change in control by the FSA and the Guernsey Financial Services Commission.”
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Readers' comments (20)
Anonymous | 15 Oct 2010 8:59 am
At this rate with Resolution hoovering up almost anything that moves are we actually going to have a true marketplace in 5 years time !
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Anonymous | 15 Oct 2010 9:15 am
Bupa health assurance or 'the entire business and share capital of bupa'? surely this is just the term/CI/IIP business isn't it?
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Anonymous | 15 Oct 2010 9:23 am
Boo Hiss!
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Ian Skinner | 15 Oct 2010 9:34 am
Is it just me, or do the service levels and product quality of a provider always decline once Resolution get their grubby mits on them
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Steve | 15 Oct 2010 9:36 am
WOW!!!!
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Pete Wildebeast | 15 Oct 2010 9:47 am
I don't know about 5 years - this consolidation is happening very quickly.
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Anonymous | 15 Oct 2010 9:51 am
OMG!!!!! This is huge news Guys! What on earth is happening to the Group Risk market. I feel sad.
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Justin | 15 Oct 2010 9:59 am
As long as I still get my leg op done.
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GT | 15 Oct 2010 10:21 am
Presumably clawback will ultimately return to 4yrs again as per Friends Provident's current stance. Is this the shape of things to come for all....
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Anonymous | 15 Oct 2010 10:39 am
It means that brokers in the Group Risk market should concentrate on trying to sell the huge need for the product. They are soft market and will drive more insurers out if they are not careful. Lets focus on selling need and actually grow the market
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