Friends Life chief executive Andy Briggs insists service standards within the newly formed UK Heritage business will not suffer following the decision to divide operations between open and closed book businesses.
The decision to split the UK life business, revealed earlier this month by Money Marketing, was confirmed by Resolution in its interim results this week.
Advisers have previously aired concerns that service levels for the four million customers in the closed life company could decline as a result of the move.
But, speaking to Money Marketing, Briggs says the firm will need to retain customers in the UK Heritage business to meet cash-generation targets and stresses Resolution has no plans to sell off the closed book.
He says allowing retention levels to drop through poor service would risk missing those targets.
Briggs says: “The majority of our cash generation will come from the UK Heritage business. If we allow retention levels to drop due to customer dissatisfaction with service levels, that cash will drop and we will not meet shareholder requirements. There is absolutely no plan to degrade the service within the Heritage business.”
Friends Life UK Heritage chief commercial officer Evelyn Bourke says: “When you mix up the legacy business with the new lines of business, the new lines of business tend to grab the lion’s share of the resources. One of the big steps in this reorganisation is that we will be able to focus those resources more appropriately.”
Wingate Financial Planning director Alistair Cunningham says: “The reality is that when providers are managing a decreasing book of business, they want to make as much profit for shareholders as they possibly can. To do that, they inevitably squeeze their service.”