UK life insurance company Friends Provident has recorded a 29% rise in annual profits gleaned from the benefits of a buoyant equity market, which enabled the insurer to boost income through acquisitions, a strong stock performance and greater operating efficiencies.
In explaining its good results Friends pointed to the merger involving its asset management unit and the purchase of Luxembourg-based insurer Lombard as moves that gave the company a better balance and the security for significant future growth.
Meanwhile, there was also good news from ongoing business as analyst expectations were exceeded by operating profits for the 12 months to December 31, 2004 of GBP344 million compared to GBP266 million in 2003. Analysts had forecast an average of GBP319 million, according to a Reuters poll.
Looking forward, Friends predicted that the Lombard purchase would result in an increase in overseas sales of life and pension business of about 35%, compared to 17% before the acquisition. Friends added that its focus on asset management, as well as its traditional lines, would also contribute to growth in the business.
Our recent acquisitions have accelerated our development and dramatically changed the profile of the Friends Provident Group. The subsequent acquisition of Lombard in early 2005 opens up new horizons in Europe, complementing our existing international operations. These developments have brought a better balance to the Group with more diversified, less capital-intensive earnings streams, and opportunities for margin and return on capital growth. They will make a significant contribution to our future profitable growth, said chairman David Newbigging.