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Resolution may split between open book and closed book

Resolution may split its operations between an open front book and a closed back book.

In a conference call this morning, chief executive John Tiner says the idea is one of a number of options being put to shareholders as an exit strategy for when it comes to concluding its life sector consolidation project.

He said: “There is merit in looking at that because if you look at the financial characteristics you see a back end which has a very large cost base and a business which is running off and generating cash, whereas the front end of the business is out in the marketplace striving to win new business and increase the value of new business, but requires a lot of cost to be dedicated to it in comparison.

“We are exploring whether there are structural solutions that would be beneficial for shareholders in separating those two books.”

In a project update this morning, Resolution says its objective is to complete the UK life project by returning the restructured businesses to their “natural long term owners”. This could include a cash sale, together or in parts, of the restructured business, a flotation, a separation between open book and closed book and a merger with another life company.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. That`s the ticket! Look after the shareholders first, never mind the policyholders. Didn`t this guy have something to do with the FSA? Talk about true colours!

  2. Hugh Jeego-You are spot on ,what about the policyholders.You are correct Tiner did in fact work for the FSA.Now the FSA were fully complicit with the plundering of the inherited assets to the tune of 1.6 billion pounds by Prudential at their policyholders expense.Was Tiner in charge of sanctioning the plundering.I must say it beggars belief that this same character is now a Chief Executive of another life company.

  3. This is fine provided the with-profit estate gets a big slug of the Newco. The problem is that once they split the two up the market can no longer have any influence for their decisions iro the back book.

  4. How about milking book?

  5. Lets face it companies like Resolution are assets strippers. This is why members of mutuals with profit funds should think twice before floating – short term gain usually results in long term pain.

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