Resolution’s profits double

RESOLUTION, the buy-out vehicle controlled by insurance magnate Clive Cowdery, is set to see its operating profits more than double to £602 million, according to analysts’ forecasts.

The sharp increase, from £275 million last year, is attributed to the fact that 2011 represents its first full year of ownership of Axa’s former UK life insurance business.

Resolution, which also owns Friends Provident, acquired the life business from Axa in late 2010 for £2.8 billion.

Investors will be keen to see if Cowdery will provide any further update regarding acquisition plans. One firm that is on his radar is Phoenix Group, the closed life funds or zombie insurer which is considering a sale.

On Friday, Phoenix chairman Ron Sandler announced that he will retire from the zombie insurer later this year, once a successor has been appointed. Sandler is best known for being parachuted into both Northern Rock and Lloyd’s of London.

Phoenix made a pre-tax loss of £4 million for 2011, compared to an £11 million profit the previous year.

Phoenix’s debts were so high in the immediate aftermath of the credit crunch that the Financial Services Authority had fears about both its viability and the fate of its 6.5 million policy holders.

The FSA forced Phoenix into seeking a £500 million cash lifeline from US investment groups and to renegotiate the terms of its bank debts. That deal cut Phoenix’s debts by a third to its current level of £2 billion and eventually led to it listing on the London Stock Exchange.