Resolution sale upheaval for Axa policyholders and staff

Six million Britons who took out savings schemes with Axa were today told they have a new insurer.

The UK life arm of the French insurer is being sold to Resolution Life in a £2.75 billion deal.

Insurance tycoon Clive Cowdery's Resolution will bolt the business on to Friends Provident, the insurer it bought two years ago, a massive task that will require the merging of computer systems.

Policyholders are unlikely to find getting information about their schemes simpler, at least in the short term.

Jobs and terms of employment are also at risk, with unions expressing their concern.

Siobhan Endean, Unite national officer, said: "Unite is appalled that as a result of the sale to Resolution Axa Life employees face a threat to their much-valued pension scheme. As a matter of urgency it is vital that the new management give the 2,200 staff cast-iron guarantees that their pensions are not in danger."

The deal takes Resolution's embedded value, a convoluted measure of an insurer's worth, to
£6 billion. It intends to grow this to £10 billion with further takeovers.

John Tiner, Resolution's chief executive, said: "If you are policyholders you have to think that it is better to be part of a strong business that has got a sustainable model. The way you create that sustainable business is through scale."

Resolution hopes for cost savings of £75 million a year, an indication of how brutal the cuts could be.