Friends Life has reported a 6 per cent drop in its UK pre-tax profit during the first six months of 2013, from £137m last year to £129m this year.
Resolution, the life sector consolidation vehicle which established Friends Life, has enjoyed a 17 per cent increase in pre-tax profit during the first six months of 2013, from £163m last year to £191m this year.
However, Resolution’s UK and Heritage divisions – which combine to form Friends Life’s UK operation – experienced an £8m drop in half year profits.
The company says this came as a result of “principal reserving changes and one-off items”, including £5m relating to the FCA fine received by Sesame Bankhall in June.
The value of new business written by Friends Life increased 21 per cent year on year, from £67m to £81m, driven by a reduction in costs.
Friends Life’s sales fell 8 per cent, from £354m last year to £324m this year. The provider says this was partly due to a deliberate shift in strategy away from high volume, low margin corporate pensions business.
Friends Life has also announced a long-term protection distribution partnership with Virgin Money, starting in January 2014.
Resolution chief executive Andy Briggs says: “The strong performance announced today reflects the attractive strategic outlook of the group and has been led by the UK division where higher value of new business has been written at a lower cash cost.
“We have continued to deliver cash from our Heritage division and made good progress on international strategy implementation.
“This financial discipline underpins strong growth in cash generation and I remain confident about the future prospects of the group.”