Standard Life has a Victor Kiam moment
This is a strange move at a time when many Financial Services organisations are looking at selling their captives, focussing on what they do and know best; Standard Life is bucking the trend.
They have tried diversifying their proposition before when they launched Standard Life Bank, focussing on savings accounts and mortgages. An adventure that ended in tears with the sale of the business to Barclays. Whilst at least the bank was in Financial Services, as many organisations have found, it takes a different set of skills and a different culture to run banking and insurance – timeframes, distribution channels and attitudes to risk are quite different, however they are lot more similar than running a Life Assurance company and running a software products business.
How much will having Focus Solutions as part of Standard Life distract executive attention away from the issues facing the Life & Pensions industry at a time where there is so much change, so much appetite for consolidation within the UK industry and so much focus on expanding in Asia for many players. With major changes such as Solvency II, the Retail Distribution Review and Pensions 2012 do the Standard Life executive have the bandwidth to grow a software business?
From a Focus Solutions customer perspective, how keen will the other 7 out of 10 insurance companies in the UK who use Focus Solutions products be on the company being bought by Standard Life? It will be difficult for Focus Solutions to argue that it is providing independent advice and solutions to the insurance industry when it is owned by one of insurance companies. Even with the best Chinese walls being built, there will always be at the back of the mind the ownership of Focus Solutions.
For Banking customers of Focus Solutions there must be a concern of where future R&D will be focussed given the new ownership.
Hopefully many of these questions will be answered over the next few days and weeks.