The Axa/Resolution deal will bring together Axa and Friends Provident’s work on corporate wrap to lead its new group business proposition, says Friends UK managing director Nathan Moss.
Resolution last week completed its £2.75bn acquisition of Axa’s UK life business to merge with Friends Provident with the combined business to rebrand as Friends Life next year.
Around 2,000 Axa staff will transfer to Friends when the deal completes in August. Friends will be looking to cut costs by around £75m through efficiency savings but would not give an estimate on potential job cuts.
Friends chief executive Trevor Matthews will lead the new team with Friends chief finance officer Evelyn Bourke taking on the new role of executive director of strategy, capital and risk.
Axa managing director of distribution services Paul McMahon and Axa managing director of protection Graham Harvey will join Friends as managing director of corporate and managing director of individual respectively.
Moss says the deal is “very much a marriage of equals in terms of capabilities”.
He says both firms were developing their corporate wrap propositions using Australian technology firm FNZ and have “very common philosophies and strategies about where we are going”.
Moss says Friends was slightly ahead in the development of its wrap but the expertise brought across from Axa will speed up development.
Friends has already launched the first stage of its corporate platform, with an investment platform created last month. Moss says the rest of the wrap will be launched in phases with resources ringfenced to ensure it is delivered this year.
He says: “We have ring-fenced our service proposition to employers and employee benefit consultants and there will be no change to the way we serve those markets.
“Axa and Friends both believe the employer will want to offer more than just a group pension, the workplace is the key future for savings. We have very good capabilities here and so do Axa in terms of education in the workplace. Together, we are going to be an extremely powerful proposition in that market.”
Moss says the merger of the respective protection arms will create a “best of breed” proposition with Axa’s menu and critical-illness products combining with Friends’ E-select platform and income protection offering.
Moss says a move into individual pensions is not currently part of the firm’s strategy. He refused to be drawn on future acquisitions that Resolution is looking to make before selling off the consolidated company by the end of 2012.
Moss welcomes the Government’s decision to scrap the proposed changes to higher-rate pension tax relief in favour of an annual allowance of between £30,000 and £45,000. He hopes that the new administration will focus on and promote the benefits of workplace saving.
He says: “We have talked to the Government about creating a safe harbour for employers so they will not get caught up in any liabilities. We have had good dialogue with Government ministers and we are hopeful they will see the workplace as a key place for saving.”