Legal & General offloads mature savings to Swiss Re for £650m

UK asset manager Legal & General is to sell its book of mature savings policies to Swiss Re for £650m (US$872m, €738m) as it looks to move away from traditional products and into more contemporary ones.

The UK’s biggest fund manager said the 1.1 million life insurance policies for retail customers, a with-profits fund valued at £24.1bn, were being taken over by Swiss Re’s ReAssure division, a life and pensions business that manages closed and non-core in-force portfolios.

The deal is subject to regulatory approval and is expected to complete in mid 2019.

Legal & General has been market with-profits funds for more than half a century, and chief executive Nigel Wilson, pictured left, said that it had been a “difficult decision”.

He added that Swiss Re was a great partner, who would be an “excellent steward” of the business.

In a statement released today, Swiss Re said that this move was consistent with its strategy of acquiring 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, part of the L&G Group.

‘Another attractive portfolio in the UK closed book market’

Thierry Léger, CEO of Life Capital, described the deal as an opportunity to acquire “another attractive portfolio in the UK closed book market” and said that it was an “excellent fit” with the firm’s strategy of growing ReAssure in order to create value for shareholders.

Swiss Re remained committed, he said, to diversifying its portfolio by accessing life and health risk pools via alternative channels, and he said that ReAssure provided an “excellent platform for growth”.

This deal brings the total number of owned or administered policies administered by ReAssure to about 4.7 million, while increasing ReAssure assets under management including investments for unit-linked and with-profit business by £33bn to about £77bn, said the company.

Matt Cuhls, CEO of ReAssure, described the acquisition as 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.”

Eugene Costello
Eugene Costello has been a journalist for some 20 years, and has written for a wide variety of UK and international newspapers and magazines.

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