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Resolution set to acquire Bupa Health Assurance

Resolution has announced plans to acquire Bupa Health Assurance.

BHA is to be bought by Resolution subsidiary Friends Provident Holdings for an initial sum of £165.15m.

The purchase is the be funded out of cash held by Friends Provident but following the completion of the deal, Resolution expects £86m of reserves held by Bupa to be released immediately to offset the cost of the purchase. After tax this will mean £63m will be returned to Friends Provident and make the net purchase cost £102m.

As at December 31, 2009, Bupa had assets worth £309m.

Resolution says it expects to release a further £22m of capital following the transfer of the Bupa business in 2011.

The Bupa business will be run as a stand alone business with Friends Provident Holdings for up to a year but the Friends Provident group risk business will eventually be integrated into the Bupa business, while the individual protection products will be integrated on a ‘best of breed’ basis.

Resolution says it expects the integration of the businesses to cost £3m.

Friends chief executive officer Trevor Matthews says: “This acquisition will strengthen our Group Risk business product range and improve the profitability of our Individual Protection business. The BHA management team led by Steve Payne will bring additional highly valued expertise to the Friends team.

“The acquisition is subject to the approval of change in control by the FSA and the Guernsey Financial Services Commission.”

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Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. At this rate with Resolution hoovering up almost anything that moves are we actually going to have a true marketplace in 5 years time !

  2. Bupa health assurance or ‘the entire business and share capital of bupa’? surely this is just the term/CI/IIP business isn’t it?

  3. Is it just me, or do the service levels and product quality of a provider always decline once Resolution get their grubby mits on them

  4. I don’t know about 5 years – this consolidation is happening very quickly.

  5. OMG!!!!! This is huge news Guys! What on earth is happening to the Group Risk market. I feel sad.

  6. As long as I still get my leg op done.

  7. Presumably clawback will ultimately return to 4yrs again as per Friends Provident’s current stance. Is this the shape of things to come for all….

  8. It means that brokers in the Group Risk market should concentrate on trying to sell the huge need for the product. They are soft market and will drive more insurers out if they are not careful. Lets focus on selling need and actually grow the market

  9. They took over AXA, too, just very recently. There was a time when Monopolies and Mergers Commission would look at mergers and take overs. I have not heard a squeek out of them for a few years now; since the credit cruch started, possibly. The coalition government is looking to scrap MMC but would it not be an idea for them to look at this before they go? At this rate there will be not more competition left in the protection marke. FSA does not appear to be bothered, but this can hardly be a good thing for the consumer?

  10. No, Ian, it’s not just you…..

  11. Excellent ‘brand’ acquisition for Resolution – so much potential there.. shame the present management never exploited it..

    Surprised the other healthcare groups are not in the bidding – caught napping perhaps..?

  12. I wonder what the purpose of this acquisition is, I cant see the policy holders being better off because of it. £22m savings is a lot and can only impact on the quality of service and reduced product quality. You are right about the service levels of other companies they have absorbed.
    Another one for the corporations then.

  13. Lets hope that Resolution can learn from these guys and what they have done in leading innovation and quality product propositions

  14. I wonder if the Resolution team want to up thier game and introduce quality protection products. It could go some way to explaining this purchase

  15. Does this mean that the last company in the market that does not load premiums for higher commissions will do so now?

  16. This could give the Bupa products a massive boost if they are going to be taxed differently

  17. Just wondering what is going to happen to Bupa field sales staff will they still be able to sell the financial protection products offered by Friends provident

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