Clive Cowdery’s investment firm Resolution will buy Axa UK’s life assurance business, it was revealed today.
Clive Cowdery, the insurance entrepreneur, will use Resolution to pay some £2.75bn to take over most of Axa’s traditional life and pensions businesses, as well as its protection and annuity operations. This will make Resolution one of the UK’s largest protection and group pensions businesses.
Clive Cowdery said he intends to merge the businesses with Resolution’s Friends Provident operation, helping to save £75m a year in costs, mainly in the areas of sales and marketing. It will be rebranded as Friends Life.
Resolution’s latest acquisition is part of wider plans to become the biggest player in the UK life insurance sector by 2013. Clive Cowdery hopes to merge three life insurers and sell or float the enlarged business by then.
Clive Cowdery’s Resolution has been trying to make the insurance consolidator model work for some time, having acquired Friends Provident in a £2bn deal last year. He was said to have drawn plans up for a break-up of Aviva last November too, but he “couldn’t make the numbers work”.
Resolution was also said to have been in talks with Prudential in March, which Clive Cowdery also wanted to acquire. The deal never materialised, however.
Resolution expects to complete the Axa deal by September, once it has received approval from the Financial Services Authority.