Insurer Resolution hit by rise in IT costs
LONDON Nov 7 (Reuters) - British life insurer Resolution said it would incur more than 65 million pounds ($103.01 million) of extra costs over the next two years from programmes to modernise its IT systems and outsource back-office functions.
The unforeseen costs will not affect Resolution's financial targets or its ability to pay dividends, it said on Thursday as it reported a 45 percent increase in profit from new business to 138 million pounds over the first nine months of the year.
Resolution was set up in 2008 by entrepreneur Clive Cowdery to make money buying, merging and selling on underperforming life insurers, but failed to complete as many takeovers as hoped because falling share prices deterred owners from doing deals.
The company, which spent 4.7 billion pounds buying three insurers including Friends Provident, in August halted acquisitions and said it would instead try to make money for its investors by improving the performance of its existing assets.
Resolution shares closed at 239.5 pence on Wednesday, valuing the company at about 3.4 billion pounds. The stock is down about 5 percent so far this year, lagging a 27 percent rise in the FTSE life insurance index