The 2013 half year UK and Heritage IFRS based operating profit of £129m is £8m lower than in 2012.
The Heritage division forms the bulk of Friend’s UK based business by value. The division is focused on the management of products that are no longer actively marketed.
Friends said an improvement in new business strain, following the continued focus on target new business platforms and lower costs, was offset by reduced principal reserving changes and “one-off items” compared to 2012.
One of these one-off items was £5m paid to the Financial Conduct Authority in relation to Friend’s-owned Sesame, part of a £6m fine for failing to ensure advice given to customers was suitable and for poor systems and controls, £1m of which was paid by the group last year.
UK sales of £324m were down from £354m in the first half of 2012, weighed on by lower volumes for corporate benefits, which the group said was as a result of a deliberate shift in strategy away from high volume low margin business.
Protection sales were broadly flat with lower post-gender neutral volumes of individual protection business offset by higher volumes of group protection.
However across the group profit before tax increased 13% to £201m up from £178m as of the end of June 2012.
Friends said this reflected a strong half-yearly performance underpinned by the reduction in the cost of writing new business.
The group has so far achieved cost savings of £154m, 96% of its 2015 target.
Friends also announced a new long-term protection partnership with Virgin Money starting from January 2014 including the distribution of a suite of high-quality simple protection products in-store, over the phone and online.
