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Friends Provident to float on market

Friends Provident has announced it is seeking to float on the market by the end of next year.


Industry experts estimate the life office would be worth £4bn on flotation, which leaves with-profit policyholders in line for a windfall payment of up to £2,000 each.


Industry sources believe a potential buyer could come forward with an offer that the insurer couldn&#39t refuse. Independent life assurance analyst Ned Cazalet says that Friend Provident would be attractive to a bank seeking to branch into the pensions business.


The motivation behind the move isbelieved to be Friends Provident&#39s desire to move into the highly competitive stakeholder market from next year. This is an area which will require competitors to have large amounts of capital, and will not yield high returns for several years.


Demutualisation would provide Friends Provident with the cash they need to compete.


The move to abandon its mutual status is seen as a big blow to it competitor Standard Life, Europe&#39s largest mutual insurer, which has come under attack by members over its status.


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