SINGAPORE (Reuters) - Friends Provident FP.L, Britain’s smallest blue-chip life insurer, will not sell its Lombard and F&C units if it cannot get a good price, recently appointed chief executive Trevor Matthews said on Wednesday.
“We don’t have to sell them...We don’t need the proceeds from the sale to support our strategy going forward,” Matthews, who joined the firm five weeks ago, told Reuters.
He added, however, that plans to sell the two units were still on track.
The firm did not need to raise funds as it would be able to cut costs by 40 million pounds a year by 2009. That would be carried out by lowering dividends as well as commissions on less-profitable policies such as single-premium products.
Friends has been attempting an overhaul of its business since January, cutting costs and putting non-core assets on the block such as Luxembourg-based insurance unit Lombard and its stake in fund manager F&C FCAM.L.
Lombard, which caters to high-net-worth individuals, is worth 500 million pounds while Friends’ asset management business was valued at 266 million pounds, a report by JPMorgan earlier this month said.
The firm’s shares have fallen nearly 40 percent since the start of the year on doubts about its ability to sell non-core assets and concerns insurance sales will be affected as Britain falls into a recession.
Turning to Asia and the Middle East, where Friends has recently opened offices in Dubai, Hong Kong and Singapore, Matthews said the primary focus would be on organic growth by focusing on niche markets.
The British insurer is targeting the region’s expatriates, who unlike most people, needed policies that gave the option of paying premiums in different currencies and accessing benefits depending on where they are based.
“We are not coming into the market saying we are going to replicate what AIG, what Manulife has done,” he said.
Reporting by Kevin Lim; Additional reporting by Brenda Goh, Editing by Jacqueline Wong