Auto-enrolment adds to business at Resolution

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Resolution said yesterday that it expects sales to accelerate at its core UK arm as more companies adopt a new system of auto enrolment to corporate pension schemes.

The group, founded as an insurance buyout vehicle but declared itself off the acquisition trail last year, said its value of new business rose 9 per cent to £38 million in the first quarter.

Five pension schemes joined its auto-enrolment system in the period, while the company said its pipeline of new scheme wins is more than double the level seen a year ago.

Chief executive Andy Briggs said: “The group has continued to make good operational progress during the first quarter of 2013 achieving record value of new business written at a lower cash cost with further delivery of targeted cost savings.”

He said the performance was led by the UK, with strong growth in the retirement income and protection businesses.

But analyst Kevin Ryan, at Investec, said Resolution’s figures were below expectations and meant it could struggle to maintain its dividend at current levels.

“The group’s recovery is occurring, in our view, but more slowly than the market has forecast,” he said.

Ryan said the need to build a cash buffer of at least £400m meant the dividend was unlikely to grow until 2015.