Axa resolves to offload UK assets

French insurer Axa is looking to sell off parts of its UK arm and is eager to do business with the buyout merchants.

Up for grabs are Axa’s legacy policies, including Sun Life, but excluding the profitable Sun Life Direct.

The IFA protection business is also in the frame, as is the the corporate pensions business, headed up by Paul McMahon.

The move is part of a focus on wealth management in the UK.

The £2.75bn price tag excludes Axa’s wealth businesses, which includes the Elevate wrap, Architas multi-manager, international business covering the Isle of Man and Dublin and Axa Winterthur Wealth Man-agement.

An Axa spokesman told schemeXpert the sale presents Axa with a business that is ready for the post retail distribution review (RDR) regulatory regime.

Philip Hutchinson, managing director of RePosition Con-sulting, said: “The RDR is going to come down very hard on commission. Group personal pensions are about commission, and now that is not going to be there, the business models are going to have to change if they [life and pensions companies] want to survive.”

Resolution has approached its shareholders to raise £2bn of the purchase price.

Having made a commitment to make a number of acquisitions in 2010, Friends Provident is under pressure to be ready to integrate any new companies into its systems and processes. This year, Friends has undertaken major work to extend its capabilities, with a particular focus in recent months on its finance function.

Clive Grimley, a partner at Barnett Waddingham, was positive about the news Resolution was looking to purchase Axa’s corporate benefits business.

He said he felt Axa had lost its way in the group pensions sector and had demonstrated a lack of commitment when it had restructured its businesses in the past two years.

Though unsure how Axa’s large and varied legacy book might be integrated with Friends Provident, he is hard pushed to see anything negative in the potential sale.

“Although Friends Provident had a period of great uncertainty, we are confident in the new management and I think it will be positive,” he said.

“It should help to embed value of the book in Friends Provident’s book of business and will enhance its reputation in the market.”