Canada Life sells legacy client block to Scottish Friendly
Canada Life has sold a block of its older UK policies to Scottish Friendly – Scotland’s largest financial mutual.
The deal, which will not impact on the company’s international outlet Canada Life International, will allow parent company Canada Life to “concentrate on core markets”.
Canada Life UK said in a statement that it has agreed to sell a block of 155,000 longstanding policies from its closed UK book with assets of £2.7 billion to Scottish Friendly. The Scottish mutual has agreed an arrangement under which Canada Life Investments will continue to manage a substantial portion of the transferring unit-linked assets.
A spokesperson for Canada Life International told International Investment that the deal would have “no impact at all” on the international Isle of
Man or Dublin-based business.
The terms of the deal were not disclosed. Pending approvals including court sanctions, the formal transfer of the business is expected to complete late 2019.
The block of policies being transferred has largely been closed to new business since 2003 and comprises life and pensions savings policies, along with some protection policies all written in the UK, Canada Life said.
Doug Brown, pictured left, chief executive officer, Canada Life UK, said: “This is an excellent move for both organisations, for Scottish Friendly by increasing their scale and for Canada Life to concentrate its resources around its core business strategy. Our priority is ensuring customers receive the highest standards of care both during this transition period, and beyond.
“Scottish Friendly has a great reputation in this area which gives us confidence that customers are in good hands.
“This was a difficult decision – many of these customers have been with us for years, arriving through acquisition or organic growth. However, following close evaluation it was clear that the sale is the right thing to do.”
Jim Galbraith, chief executive of Scottish Friendly, said: “This activity is a key element of Scottish Friendly’s three-part growth strategy so Canada Life and their policyholders can be confident that the process of change will be as smooth and seamless as possible and can look forward to the friendly and efficient service that Scottish Friendly specialise in.”
Canada Life said that it will continue to administer these customer policies until the transfer, which is expected to occur in late 2019, by which time customers will have been contacted with full details regarding the ongoing management of their policies.