Resolution and Friends announced on Tuesday that they were recommending Resolution’s £1.86bn bid to shareholders after weeks of talks.
Annuity Direct chief executive Bob Bullivant says: “Friends Provident has always been a superb organisation in terms of the way it has treated customers. The only question mark is whe-ther Resolution will try to cha-nge that culture and whether the way customers are treated will be affected.”
SimplyBiz chairman Ken Davy says: “It is difficult to say whether the deal will benefit policyholders or not. A strong parent of Friends will give greater security to policyholders because the likelihood is that Resolution will develop into a company of significant scale. On the other hand, Cowdery will be focusing on increasing profitability in the short term and focusing less on the business long term.
“But I would not advise people to stop doing business with Friends Provident.”
Richard Jacobs Pensions & Trustee Services managing director Richard Jacobs says he will no longer recommend Friends as a result of the deal.
Jacobs says: “Resolution is a predator. The only reason Clive Cowdery has bought Friends is price. He is not concerned about customers, he just wants a return on the money. Companies need to learn the lessons from the banking crisis – that chasing profit alone is the quickest way to collapse.”
Friends says its with-profits committee will continue and its 2.7 million customers should be unaffected.
Friends Provident UK managing director Simon Clamp says: “This business has been set up and sold to investors as a new business consolidator.
“To be successful in the UK market it must win new clients and look after existing clients. If it does not, then intermediaries will not deal with it.”
Resolution plans to acquire at least two other providers in the next 18 months. It aims to sell off the combined business in two to four years.
Resolution is understood to have already held talks with Prudential and other possible targets include Scottish Widows and the UK arms of foreign insurers such as Axa, Zurich and possibly Aegon.