Resolution aims to double UK infrastructure investment

By Chris Vellacott

LONDON, Feb 14 (Reuters) - British insurer Resolution could double the funds it is setting aside to invest inUK infrastructure by the end of 2016, its finance director said.

The company, known to customers by the Friends Life brand,has already allocated 500 million pounds ($831.82 million) forpower plant, road and port investments and will look at adding asimilar amount once this is fully deployed, Resolution's ChiefFinancial Officer Tim Tookey told Reuters on Friday.

"We certainly would have an appetite to do moreinfrastructure, say another 500 million pounds," he said."Timing would depend on the opportunities and (it) could easilybe end-2016 before we could invest 1 billion pounds wisely."

Many big insurers are eager to invest in infrastructureprojects because they offer long-term, inflation-beating,regular returns from road tolls and rents which fit well withlong-term liabilities on annuities sold to pensioners.

These products, exchanged for a client's pension potaccumulated through their working life, commit the insurer topaying an income until death, which can come decades later.

Resolution is one of six big UK insurers that pledged inDecember to invest 25 billion pounds in transport and energyprojects over the next five years.

The others were Legal & General, Prudential, Aviva, Standard Life, and Lloyds BankingGroup unit Scottish Widows.

Britain's government has made boosting private sectorinvestment in infrastructure a priority as it grapples withcrumbling and overcrowded roads, railways and airports whiletrying to curb public spending.

More than half of Resolution's current infrastructure fundshave yet to be deployed. Its investments so far include a75-million-pound loan facility to power company Drax Group Plc,due to mature in June 2018 and backed by a government guarantee.