Resolution Plans Acquisition of Bupa Health Assurance for $164 Million

Resolution Ltd., the insurance buyout firm founded by Clive Cowdery, plans to buy Bupa Health Assurance Ltd., its third and smallest acquisition to date.

Resolution will pay 102 million pounds ($164 million) for the health insurer, the Guernsey, Channel Islands-based firm said today in a statement. It will fund the deal with existing capital from its Friends Provident division.

Bupa will add a variety of new products to Friends Provident including life insurance, income protection and critical illness cover for companies, Resolution said. Friends Provident, bought for 1.9 billion pounds last year, currently sells pensions to companies and income protection for individuals.

“This transaction is entirely consistent with Resolution’s strategy,” Resolution Chairman Michael Biggs said in the statement. “It will also enhance Friends’ proposition as a focused and disciplined writer of new business in key product areas.”

Resolution will pay 165.2 million pounds in cash for Bupa Health and redeem about 63 million pounds immediately from the company’s reserves, the buyout firm said. The price represents about 62 percent of Bupa Health’s embedded value, a measure of future profits from existing policies.

Resolution, founded by Cowdery in 2008, acquired Friends Provident for 65 percent of its embedded value. The firm announced its intention to buy Axa SA’s U.K. life insurance operations for 2.75 billion pounds, or 79.8 percent of its embedded value, in June.

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