Life insurance giant Prudential is to focus on reducing costs after announcing major outsourcing plans.

Philip Moore has quit as chief executive of Friends Provident after the firm failed to complete a £8.6 million merger with fellow life assurer Resolution.

Insurer Resolution has withdrawn its backing for Standard Life's £4.92 billion takeover offer. The decision comes after Standard's rival, Pearl, moved in with a higher £4.94 billion indicative offer.

Insurance groups Friends Provident and Resolution have revealed a last-minute sweetener in support of their merger by promising shareholders £1 billion next year. Will this be enough to fight off competition from Pearl and Standard Life?