Resolution plc

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This article is about the former company acquired by Pearl Group in 2008. For the currently-active investment firm, see Resolution Limited.
Resolution
Industry Insurance, Pensions, Life Assurance
Fate Acquired by Pearl Group
Founded 2004
Defunct May 2008
Headquarters London, England, UK
Key people Clive Cowdery, Chairman
Andy Briggs, CEO
Revenue £5,152.2 million (2006)
Operating income £482.3 million (2006)
Net income £531.3 million (2006)
Employees 40 (2009)

Resolution plc was a UK insurance company headquartered in the City of London. It was listed on the London Stock Exchange and was once a constituent of the FTSE 100 Index but was acquired by the Pearl Group in May 2008.

History[edit]

Early history[edit]

The Resolution Life group was formed in 2004 to provide a vehicle for life funds that have been closed to new business, but have liabilities extending many years into the future, nicknamed zombie funds.[1] The first purchase was the life insurance business of Royal & SunAlliance, followed by the purchase of Swiss Life's UK business.

In September 2005 Resolution Life merged with the FTSE company Britannic Group, who had closed to new business in 2003.

In 2006 the merged group bought the life business of Abbey National, a transaction of £3.6 billion that brought entry into the FTSE 100.[2]

On May 30, 2007, Resolution announced a strategic partnership with Capita which will result in the transfer of approximately two thousand staff in Customer Services and IT and a phased outsourcing of back-office customer services to India.[3]

Takeover by Pearl Group[edit]

On July 25, 2007, Resolution agreed a merger with Friends Provident to create a new entity, Friends Financial, with a market cap of circa £8.6Bn, however by September 2007 it was announced that Hugh Osmond's Pearl Group, a critic of the proposed merger with Friends Provident, had undergone talks with Swiss Re about a potential deal to take over Resolution,[4] but talks broke down. On 10 October 2007, Pearl made a formal offer of 660 pence per share, worth approximately £4.5 billion, in conjunction with the Royal London Mutual Insurance Society.[5] Standard Life and Swiss Re also entered the bidding for Resolution, and for a brief period on October 26, 2007 their cash and shares bid, worth £4.9 billion was recommended by the board, which called off any deal with Friends Provident.[6] Within a short space of time, Pearl came back with an all cash offer of 720 pence per share. In addition, Hugh Osmond, chief executive of Pearl, now controlled a stake of 24.1% of Resolution's ordinary shares, which would have effectively blocked any planned merger from Standard Life as it would have required 75% approval from shareholders. In mid-November 2007, Standard Life pulled out of the merger and the offer from Pearl was recommended by the board to shareholders.[7]

At the extraordinary general meeting, held on January 8, 2008, the shareholders overwhelmingly agreed to the merger.[8] Having been approved by the Financial Services Authority in mid-April 2008, the acquisition was completed on 1 May 2008.[9]

The Scottish Provident and Scottish Provident International brands and various in-force blocks of policies were taken over by the Royal London Group, with the rest going to Pearl. The Resolution brand was retained by Clive Cowdery.[10]

Relaunch as an investment vehicle[edit]

Main article: Resolution Limited

Resolution was relaunched by Clive Cowdery as an investment acquisition vehicle in December 2008 and resumed talks with Friends Provident in July 2009 but was rejected twice,[11] though Friends Provident eventually agreed to a takeover in August 2009.[12]

Operations[edit]

Brands owned by the Group included:

  • Swiss Life (UK)
  • Phoenix Assurance Ltd
  • Bradford Insurance Company Ltd
  • Royal & Sun Alliance Linked Insurances Ltd
  • Alba Life Ltd, previously:[13]
    • Britannia Life
    • FS Assurance
    • Crusader Insurance
    • Life Association of Scotland
    • Foreman and Staff Mutual Benefit Society
  • Brittanic Asset Management (previously Brittania Asset Management, now Resolution Asset Management)
  • Britannic Assurance Plc
  • Britannic Retirement Solutions Ltd
  • Britannic Unit Linked Assurance Ltd
  • Century Group Plc
  • Century Life Plc
  • Phoenix Life & Pensions Ltd
  • Allianz Cornhill (life operations)[2]

References[edit]

  1. ^ Zombie Funds
  2. ^ a b Company history
  3. ^ Capita strategic partnership announcement
  4. ^ Barwell, Tim; Thompson, Sarah (2007-09-17). "Northern Rock, Lloyds, Resolution: U.K., Irish Stock Preview". New York City, United States: Bloomberg L.P. Retrieved 2008-04-29. 
  5. ^ Smith, Shelley (2007-10-10). "BP, Carpetright, New Star, Resolution: U.K. Equity Preview". New York City, United States: Bloomberg L.P. Retrieved 2008-04-29. 
  6. ^ Jones, Sarah; Thompson, Sarah (2007-10-26). "U.K. Stocks Gain for Second Day, Paced by Rio Tinto, BHP, Shell". New York City, United States: Bloomberg L.P. Retrieved 2008-04-29. 
  7. ^ Odoi, Antoinette (2007-11-17). "Resolution board says yes to £5bn Pearl bid". London, England: The Guardian. Retrieved 2008-04-29. 
  8. ^ "Resolution PLC - Result of EGM". New York, United States: Thomson Reuters. 2008-01-08. Retrieved 2008-04-29. 
  9. ^ Ferreira-Marques, Clara (17 April 2008). "UK approves Pearl takeover of Resolution". Reuters. Retrieved 2008-04-28. 
  10. ^ "Recommended Acquisition of Resolution plc" (pdf). Resolution plc. 2007-11-16. p. 44. Retrieved 2008-04-29. "Since Pearl intends to apply the Pearl brand to the Pearl Assets, Pearl and Clive Cowdery have entered into an agreement which provides... for the transfer from Pearl to Clive Cowdery of the right to the Resolution name" 
  11. ^ "Friends rejects Resolution again". BBC News. 20 July 2009. Retrieved 2008-04-28. 
  12. ^ "Friends backs Resolution takeover". BBC News. 11 August 2009. 
  13. ^ Alba Life history