Life insurance firms Friends Provident and Resolution, which announced an £8.6bn merger in July, have reiterated that IT is at the heart of their planned combination as Friends Financial.
The two companies have also set an expected merger date of 29th November after an extraordinary general meeting earlier that month. But the merger has faced some doubt in recent months after Friends Provident was rumoured to have been approached by Zurich Financial, and insurers Pearl and Standard Life each expressed an interest in buying Resolution.
Nevertheless, in a statement Friends and Resolution expressed their commitment to the merger: “A joint integration project has been launched, under which considerable progress has been made in planning the integration of the two businesses.” They said this included “the harmonisation of financial reporting, planning and management information”.
Friends Provident maintained that it was using technology to strengthen distribution, improve service and reduce costs, saying that its processing capabilities and its e-select electronic underwriting system were important to its success.
Cost savings through this IT consolidation are also crucial to the merger, and Friends Provident has gained a reputation for effectively consolidating the IT systems of companies it has bought in the past.
There will initially be limited integration of service platforms to minimise disruption, but all new business will transition to Friends Provident's platforms over time, the companies said previously. Friends Provident business will not be outsourced and no material changes will come about to Resolution’s £580m outsourcing agreement with Capita, which is understood to have begun on 1st August.
The insurers have forecast implementation costs of around £120m to integrate IT and finance and asset management, including redundancy costs and policyholder communications.