RESOLUTION, the buyer and consolidator of UK life insurance assets, sold £270m of fresh life policies in the first three months of the year, it said yesterday.
New sales through its newly-renamed Friends Life business rose 52 per cent or £92m on the same period in 2010, with £66m of the increase attributed to its acquisitions last year of Axa UK Life and Bupa Health Assurance.
Sales in the UK were £172m in the quarter, it said in its interim management statement.
However, the sales narrowly missed the consensus analyst estimate of £275m.
Resolution confirmed it was on track to deliver the mid-teen returns it has targeted from its strategy to buy and merge underperforming UK life insurers.
The integration of its three acquisitions to date was “progressing well” towards achieving the expected £112m annual pre-tax synergies by 2013, it said.
And it “remains confident” of meeting its target of returning £400m cash per year to shareholders from the end of 2011 without damaging its value.
Investec analyst Kevin Ryan said Resolution remained an attractive stock as it “remains a cash cow run entirely for the benefit of shareholders with the management interests completely aligned.”
But he questioned why shareholders cash had remained flat at just over £1bn in the quarter, and said he was eager for more information on when Resolution would return the promised capital to its investors.
Resolution’s shares fell 0.4 per cent to 296.3p yesterday valuing the firm at about £4.3bn.