The FTSE 100 group, which was set up in 2008 to buy and merge struggling insurance businesses, claimed it is now “appropriate” to move out of its restructuring phase after posting a 59 per cent increase in pre-tax operating profits in 2013.
Under Mr Cowdery, Resolution merged the former Friends Provident business with parts of Axa and Bupa to create a group focused on generating cash and building the company’s pension offering. And now, with the job complete and its founder reportedly planning the next phase of his Resolution adventure on foreign shores, Friends Life confirmed that it will seek permission from shareholders to rename the company.
According to a spokesman, the focus is now on using the firm’s “scale and competitive advantage” in “attractive growth markets”, with a single name that is “much simpler, avoids confusion and will be beneficial from a trading perspective”.
Trevor Matthews, former chief executive of Friends Provident and current non-executive director of three Sydney-based financial service firms, agreed that the time is right to move on. Mr Matthews, who introduced the Friends Life brand, described the move as “a natural step in the evolution of the business”, and representative of Mr Cowdery’s desire to work on new projects.
He said: “The original promise of building a large operation was not delivered, but it... did well to bring three companies together. The quality of products it is offering also looks good, and as a business it has made good, solid progress. It is a great re-brand. Friends Life is a strong brand with a lot of potential, whereas Resolution is a closed-book brand.”
Mr Matthews said he was impressed with his former employer’s decision to concentrate on its UK operations, but admitted he was “surprised” that Lombard, its loss-making European wealth manager, is yet to be sold. He predicted this will be the next significant news to come from Friends Life, which confirmed it is “in discussions” to sell the Luxembourg-based business.
Alan Walker, head of financial services at Capgemini Consulting, was equally unsurprised that Resolution’s restructuring process had come to an end. He deemed it a “success”, but said it made less of an impact than Mr Cowdery’s earlier purchase and consolidation of closed-life and pensions books.
He said: “Resolution dropped its acquisition ambitions some time ago, and the trading entity has been branded Friends Life for a while. It is entirely natural to change the name of the group to reflect that. This is good news for the Friends Life brand. It means management are now entirely free to focus on rebuilding its proposition to market.”
While some in the industry applauded the timing of the announcement, Clive Waller, chairman of the Investment Network, was more sceptical. He claimed the decision to re-brand and end the restructuring process could have been linked to the regulator’s crackdown on offshore insurers.
Mr Waller said he warned the ABI about zombie firms in 2007 when it rejected his request for protection providers to publish the percentages of claims paid to policyholders. He said zombie funds should never have been able to operate in the market, although he was confident that Mr Cowdery would pop up elsewhere in the future.
“Zombie companies have no connection with the policyholders and are only interested in the shareholder price, not the customer,” he said.
Mr Waller was equally damning of Friends Life’s future prospects, particularly given the government’s recent pledge to revolutionise the pension market. He added: “How will it fare now? The news of annuities is fairly horrid, as it was an area where Friends Life made a lot of its money. I find life companies difficult to love, and they are becoming less and less relevant. They should be focusing more on insurance, and they have lost their distribution because IFAs do not love them any more.”
Daniel Liberto is features writer at Financial Adviser
