Life assurance group Resolution said it is whipping its acquired businesses into shape and making good progress on its financial targets.
The value of new business in the first quarter of 2012 was £35m, up 83% from the £19m achieved in the corresponding quarter of 2011. The new business cash strain, which covers front-loaded costs resulting from new business, was trimmed to £33m from £69m a year earlier.
Sales on an annual premium equivalent (APE) basis for the group rose 8% to £292m from £270m the year before.
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The principal driver of the group's improvement has been through the UK business where the value of new business increased from £6m to £22m reflecting the increasing proportion of new business on the target platforms and ongoing actions to generate operating cost synergies.
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International performance continues to be affected by market and operating headwinds with the value of new business down to £9m in the first quarter from £10m the year before. The International division's new business cash strain was marginally down to £28m from £29m in the first three months of 2011 as the focus of the business moves towards new business with lower strain.
The Chief Executive Officer of the International division, John Van Der Wielen, is currently undertaking a review of the division, the results of which should be published in the second half of 2012.
The Lombard unit, which is excluded from the International division's figures, saw the value of new business rise to £4m from £3m the year before, driven by a 29% increase in new business volumes. Sales of £44m on an APE basis, up from £34m the year before, reflected an increased proportion of large cases in the period.
Run-rate synergies of £50m had been achieved by March 31st 2012. The group is targeting £112m run-rate synergies by the end 2013, and £143m run-rate synergies by the end of 2015.
The group said that at the end of March it had an estimated Insurance Groups Capital Adequacy surplus at the Friends Life group level of £1.9bn, down from £2.1bn at the end of 2011, reflecting the payment of a £250m dividend up to Resolution Holdings (Guernsey) Limited in March 2012.
Group available shareholder cash dipped to £841m at the end of March from £853m at the end of 2011, and this is before the payment of a dividend to Resolution Limited shareholders and a scheduled deferred consideration note repayment of £60m.
JH
