Trevor Matthews, the former Standard Life executive now running Friends Provident, yesterday admitted the sector is poised for consolidation.
Such a shift would leave Friends, which is the fifth-largest listed UK insurance company behind Aviva, Prudential, Standard Life and Legal & General, particularly vulnerable.
Matthews said: "Eventually there will be more consolidation in this market place.
"Maybe there will be some dislocation out of this.
"At the moment merger and acquisition activity is subdued," he acknowledged pointing out "the difference between buyers and sellers is vast".
But he stopped short of saying he would fight for Friends' independence.
"Nobody can say their company is going to stay independent particularly given the last few months with companies falling away.
"But we can say do business with us and your clients will be well looked after'."
Friends has in the past few years agreed a merger with Resolution, which was later abandoned, and seen private equity company JC Flowers make an attempted takeover. Matthews is seeking to strip £60m from Friends' £275m cost base by the end of the year and focus it on protection and group pensions in the UK.
He said: "This company is going through a change. We will be in good shape in due course."
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