Tesco to sell Friends Provident policies
Friends Provident has struck an exclusive deal to sell insurance through supermarket giant Tesco.
But the shares fell 3p to 59¼p after the insurer yesterday announced a worse-than-expected fall in sales for the first quarter to March.
They tumbled 40 per cent to £109million as Friends pulled back on unprofitable business and its core corporate pensions business was walloped by rising unemployment. Chief executive Trevor Matthews said the Tesco deal was a “real coup” and “significantly expanded” the company’s distribution network.
Tesco is launching a major push into financial services. Initially Friends will sell basic protection insurance, but Matthews is hopeful there may be opportunities to expand the product range later. The insurance will be branded Tesco. Matthews acknowledged the results were “not good”.
He said “40 per cent is a big number”, but added the group’s capital surplus was strong at £800million, down £50million over the three months as markets fell.
It is well on the way to meeting £40million in annual cost savings, having already achieved £31million.