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Profits leap for Friends

Friends Provident saw profits soar by almost half in the first six months of this year.

Life and pension business rose by 15 per cent from 176m to 202m on an APE basis. This compares with average market growth of around 5 per cent, after stripping out a single one-off deal between Prudential and Resolution Life which lifted that figure to 8 per cent.

Overall, group profits rose 46 per cent to 233m compared with 160m in the same period last year. Friends share of the life and pension market grew from 4.3 per cent to 4.5 per cent.

Fund management arm F&C saw assets rise by 3.3bn despite 1.6bn of outflows,. The loss of the Resolution Life fund management contract means that a further 22bn of assets will be redeemed, although the group could say when that will take place.

Friends Provident chief executive of life and pensions Ben Gunn says he expects market growth in the life and pension sector to be around 5 per cent for this year and is confident that the company can grow its individual pension business which accounted for just 6 per cent of new business compared with 55 per cent in group pensions.

He says: “There are lots of opportunities for advised products around A-Day but it depends what happens with RU64. The inevitable effect of multi-ties will be to depress margins but increa-sed volumes will offset this.”

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