It’s hard to see the point of some businesses. This week the particularly pointless Resolution produced an interminable, impenetrable statement. Its bosses have decided that something must be done, and breaking it up is something, so it must be done. Resolution calls this a “self-managed exit plan”. It’s tough on the shareholders, who had been anticpating their own exit plan, in the form of a £250 million cash return which they had been half-promised by the management.

Alas, the markets have been too choppy for the lash-up that is SS Resolution to remain seaworthy without the £250m, so the company is to be split between a business which may or may not have a future, and one which definitely doesn’t. It may even add value for shareholders, despite what are delicately described as “dis-synergies arising from separating into two separate businesses” but it would be unwise to bet on it.

Resolution is a sort of echo of a brilliant coup organised by Clive Cowdery, who made a bucketload of money from closed life funds in Resolution Mk1. This encouraged his grateful backers to ante up for a repeat performance. It hasn’t worked out, despite the recruitment of John Tiner, formerly of the FSA, to run the show. Last year it admitted that it couldn’t find anything else to buy, and would instead try to make the best of what it had.

Compared to the exhilaration of the deal, this process is jolly dull, even for those with the expertise to do it. Life offices are complicated, often with back office systems which are a nightmare to integrate. Life office accounts are impossible for outsiders to understand, and the increasingly oppressive regulatory environment drains the meaning from what is published. Resolution made an operating profit of £861 million (IFRS basis) or £517 million (MCEV). Take your pick. Oh, the IFRS figure included £404 million of “one-off items from management actions” while the MCEV figure included £140 million of “positive one-off assumption changes”.

Neither is much help in valuing the shares. Increasingly, the only figure investors can rely on is the dividend. In Resolution’s case, it’s up by 10%, as promised. This sounds good, and if it could be sustained, would make the shares at 257p attractive as a sort of high-yield annuity yielding 7.5%. Is it sustainable? Nobody really knows, not even Clever Clive and Honest John. Life assurance as protection is a low-margin commodity business. Life assurance as a savings vehicle, which is where the money is, increasingly looks anachronistic. The mumbo-jumbo of with-profits, whole-of-life, annual and terminal bonuses was designed to baffle, and to disguise the proportion of the premiums which disappear in costs, fees and commissions. The game’s up. Life company shares have been miserable performers, but few have been quite as miserable as Resolution. Now you can see why.

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