Strategic review at Friends Provident

Last month, chief executive Philip Moore left Friends after less than a year amid a failed merger attempt with Resolution, the closed fund consolidator.

The insurer has now announced it is carrying out a strategic review that could result in a sale of part or all of the company.

In order to support new business growth, the insurer needs to raise around £600 million which could prove difficult in view of the ongoing credit squeeze.

Options available to the insurer are selling Lombard, its international division that specialises in services for high net worth individuals, it is estimated that this business is worth £700 million.

Another option is selling its 53% interest F&C Asset Management, the global asset manager for institutional and retail investors.

It is expected that the insurer will update the market at the end of the fourth quarter in January.

It is believed that Sir Adrian Montague, the executive chairman, is against an outright sale of the business but many analysts are expressing the view that Friends Provident does not have an independent future.

Friends is the UK’s fourth-largest life insurer and has a market value of approximately £3.7 billion.

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