Friends pals up with Tesco in revival bid

Friends Provident today unveiled a link-up with Tesco in a boost to new chief executive Trevor Matthews' plan to turn around a business that has been floundering.

The insurer will sell simple life insurance products via the supermarket's personal finance arm, which is expanding aggressively into the financial services market.

"It's a real coup for us," said the Aussie, poached from Standard Life to rescue the company.

The products will be branded Tesco, and sold over the web and in store.

Friends' first-quarter sales slumped 40% to £70 million — "not a good number," Matthews conceded, adding: "The company is going through a significant turnaround during a torrid recession."

The Asian market has been especially bad. Hong Kong, a key market for Friends, is down 75%. Matthews could be paid towards £4 million in the next five years if he succeeds in putting life back into Friends.