Swiss Re reveals £650m life acquisition
Swiss Re is acquiring 1.1 million life insurance policies from UK financial service provider Legal & General Group for £650 million.
The policies will be managed by ReAssure, a UK closed life book consolidator within the Swiss Re Life Capital business.
This move is consistent with Swiss Re's strategy to acquire closed life books in the UK. The policies – which include with-profit, unit-linked and savings products – will be transferred to ReAssure from Legal & General Assurance Society Limited, which is part of the L&G Group.
"This is an excellent fit with our strategy to grow ReAssure in order to create value for shareholders,” said Thierry Léger, CEO of Life Capital. “Swiss Re remains committed to diversify its portfolio by accessing life and health risk pools via alternative channels, and ReAssure provides an excellent platform for growth."
As a result of this transaction, ReAssure Group will administer an additional 1.1 million policies, bringing the total number of owned or administered policies to approximately 4.7 million. At the same time, ReAssure assets under management including investments for unit-linked and with-profit business will increase by £33 billion to approximately £77 billion.
The business being acquired is in run-off and generated £105 million operating profit in 2016, a run-rate which is unsustainable, according to Bernstein analysts. “Strategically it makes sense for a consolidator to take on the closed book,” the analysts noted.
Matt Cuhls, CEO of ReAssure, said: "This is an exciting accomplishment that allows us to achieve economies of scale using our proven platform. After the successful integration of Guardian, we are confident in our capability to deliver once again. The UK closed book market is consolidating, and this deal allows us to do what we do best: integration, migration and the delivery of great customer service."
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