Misys says it is expecting Sesame’s network to see a drop-off in numbers in favour of multi-tie proposition Sesame Select.
The group, which last week issued its interim results for the six months to November 30, 2006, says there are curr-ently 1,450 registered individuals signed up to Sesame Select and it expects this will lead to a reduction in appointed representatives in the network.
Sesame’s future is in the balance as parent Misys still sees the financial services group as strategically non-core to its business.
But Misys was pleased with Sesame’s improved perfor-mance as it increased statutory revenues from £184m to £188m, with a static £8m stat-utory operating profit in 2005 and 2006.
Misys chief executive Mike Lawrie says: “Sesame, which remains non-core to us stra-tegically, capitalised on favourable market conditions and product demand to perform strongly.”
The net provision for endowment complaints is £10.2m but Misys says the final settlement cost is uncertain as it depends on the proportion of valid complaints, redress costs on each policy and the admin cost of handling complaints.
The firm says: “The recoverability of these costs will depend on whether the Sesame or member insurance policy responds and, if so, what level of excess will apply and the ability of Sesame to recover costs from members, many of whom are no longer part of the network.
“In establishing the period end provision, assumptions have been made regarding each of these based on recent actual experience. As a result, the actual cost may differ from that for which provision has been made.”