Wednesday 25 April 2018

Friends First is touted for sale by Dutch owners

Tom Browne, chief executive officer of Friends First
Tom Browne, chief executive officer of Friends First

Gretchen Friemann

The Dutch owner of Friends First – which offers pensions, investment, and income protection insurance products – is understood to have quietly offered the business for sale in recent weeks.

Several sources told the Irish Independent that a number of rival firms have cast an eye over the company, with Aviva Insurance thought to be among the potential suitors.

A spokesperson for Friends First said “it is not our policy to comment on market rumours or speculation”. Aviva Insurance also declined to comment.

However, it is understood the Netherlands headquartered-Achmea is testing the waters and has discussed a potential sale of its fully-owned subsidiary with several parties. Achmea is one of Europe’s leading insurance groups and the largest Dutch provider of non-life, health and income protection.

Achmea, formerly known as Eureko, sank into the red last year after it was hit by a wall of claims following a severe hailstorm in Europe, driving it to an operational loss of €323m. That resulted in a net result of negative €382m in the 2016 financial year, according to its latest annual report.

The company has now pledged to cut its operating costs by €200m by 2019 and intends to lower its headcount by 2000 by 2020.

Friends First, which traces its origins back to 1834, employs 266 people in Ireland and oversees close to €4.6bn in assets.

Sources said a number of other groups may run the rule over the insurer, including New Ireland Assurance, Bank of Ireland’s insurance subsidiary.

At the lender’s results last month, management indicated it would look at “opportunistic” acquisitions to bolster its €4bn private banking arm.

Dublin-based Merrion Capital, which has €2bn in assets under management, is also understood to be on the prowl for bolt-on acquisitions.

However, sources stressed talks about a possible sale on Friends First are at an early stage and may not progress.

Friends First, which is led by CEO Tom Browne, suffered heavy losses during the financial crisis and was among the worst-hit of the Dutch giant’s European subsidiaries.

The business has improved since then with the latest financial report on its managed pension funds showing an increase in gross premiums to €497m in 2016 from €355m the previous year.

Sales at its assurance division grew by 25pc in 2016 compared to 2015, according to the latest financial statements.

Irish Independent

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