Two of the largest UK life assurance companies – Friends Life and AVIVA are planning to merge. Their strategy is to increase efficiency and savings by economy of scale. What the real result will be is more uncertain. Each of them already have commitments from having absorbed a number of earlier life companies. For example, Friends Life took over Friend Provident, F&C (Foreign and Colonial), BUPA, Resolution and others. While AVIVA have General Accident, Commercial Union, Norwich Union and others. Each of their subsidiaries brings past responsibilities and contracts to honour. At the moment the Stock Market considers it a good idea for Friends Life and a not-so-good one for AVIVA and their share prices have reacted accordingly.
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