Friends Life is forecasting a total cost of £280m for its business restructure and outsourcing programme after acquiring the Axa UK Life book, latest results show.
The life and pensions provider's full year results for 2012 showed separation and integration programme costs of £124m for the 12 months. The cumulative spend was £257m, and the full cost is now estimated to stand at £280m.
In November 2012, the group provided an update on the costs of completing the programmes with extensive re-planning undertaken to assess the impacts of addressing the complexities and necessary remediation work arising from the proposed migration from AXA systems.
The results added outsourcing costs reached £41m and Solvency II costs were £76m.
Costs of £84m relating to the Diligenta outsourcing implementation were provided for as at 31 December 2011. In 2012, a further £82m in costs have been incurred, offset by a £31m provision release and £10m pension scheme spend cut following the transfer of outsourced employees.
The firm said operating profit had fallen to £300m, from £672m the previous year. The results explained this was mainly due to the £416m one off benefits reported in the previous year.
Andy Briggs, group chief executive, said: "The group has made good operational and financial progress in 2012. The UK division performance has been especially strong with sales up 19% while reducing new business strain by 56%. Our UK and Heritage divisions are progressing strongly through their transformations."
