Resolution pledges £500m extra cash to investors
Resolution, the UK life insurance consolidation vehicle, is to return £500m in cash to investors over the next year, starting with £250m in share buybacks from tomorrow.
The insurer, which has combined assets from Axa, Bupa and Friends Provident, will return the second £250m to shareholders in the first half of 2012 after making £235m in capital synergies throughout the rest of this year.
However, it warned that the synergies are subject to several approvals – both regulatory and delivery.
The £500m is on top of the £400m of annual distributable cash returns already announced, the company said.
It added that it hopes to release more cash as it finds further synergies and clarifies its Solvency II obligations, which may see it required to hold less capital than it currently does.
The Resolution board also ruled out further overseas acquisitions, which it had suggested at previous investor meetings but found shareholders largely opposed to.
“The UK life project remains on track to deliver its targeted returns; and the board confirms that Resolution will be exclusively focused on the UK life project,” it said in a statement.
Investors have been expecting Resolution to outline its cash return programme for several months.