Resolution says pension rivals priced too low

THE BOSS of FTSE 100 life insurer Resolution yesterday suggested rival firms entered dangerously low bids to win major pensions contracts during the introduction of auto-enrolment schemes for large companies.

Chief executive Andy Briggs told City A.M. that his company missed out on some “super-large schemes” at the end of last year due to a focus on protecting profit margins.

“We were involved in all of those tenders, we chose not to play,” he said.

Since then prices have returned to normal, leaving Resolution to focus on winning pensions contracts from medium-sized companies.

“I’m happy with what we’ve done,” Briggs added.

He was speaking as Resolution unveiled a 17 per cent drop in first-quarter sales to £242m, which the company attributed to delays in signing up UK businesses to the new pension scheme.

Even though sales fell the value of new business grew nine per cent to £38m, suggesting improved margins.

Briggs also urged investors to stick with the business as it works through a transformation process unveiled last August. Originally set up as an acquisition vehicle to combine a number of underperforming life insurance businesses into a more profitable whole, it has instead decided to focus on growing profits from existing businesses.

Briggs said that proving “basic execution and delivery” of the strategy could push up the share price and bring the company’s dividend yield into line with rivals such as Standard Life and L&G.