Quilter sells life assurance division for £425m

Quilter sells life assurance division for £425m

Quilter has sold its heritage life and pensions devision to ReAssure for £425m as the company  targets organic growth.

ReAssure, the UK's sixth biggest life insurer, agreed to buy the heritage life and pensions division from Quilter, just days after weak demand prompted parent company SwissRe to shelve a proposed £3bn flotation of the UK unit. 

Quilter said the sale, which had an "attractive valuation", would solidify its position. "The sale of Quilter Life Assurance will further act to solidify Quilter's position as an advice led, modern wealth manager," the company said in a statement, adding it would update on the amount and method of distribution at the closing of the transaction, expected to be late 2019.

Quilter CEO Paul Feeney added: "ReAssure is a highly regarded manager of closed book assets and has the experience to deliver continued high quality investment and administration services to clients of Quilter Life Assurance. 

Quilter Life Assurance, a closed book of unit-linked policies, was once the core of Quilter's UK business. It was made up of pensions, investment and savings and protections products, with both retail and institutional offerings.

The announcement comes as Quilter reported an uptick in pre-tax profits for the first six months of 2019, rising 5% to £110m in the first half of last year to £115m this year.

Performance improved across most of the company apart from Quilter Life Assurance, which saw its profits fall slightly from £27m in the first half of 2018 to £26m this year. Assets under management at the wealth manager grew by 8% since December, reaching £118.4bn and up from the £109.3bn managed last year.

However, Quilter clients redeemed more than £600m in the first half as they followed a number of departing wealth managers out of the door, accounting for the bulk of £800m in outflows over the period.

"We expect this pressure to continue at a similar level through the remainder of 2019," noted Feeney in a statement.

The firm is also eyeing further growth following its buy-out of Lighthouse and Charles Derby.

Paul Feeney said the advice market - with 26,000 advisers, many of whom are due to leave the profession over the next few years - would still throw up opportunities which Quilter might take up.

He said: "[We will focus on] predominantly organic growth, but there are still opportunities out there. The advice market is consolidating, and clearly we have played a part in that, but [the opportunities are] probably not of the same scale of the ones we have done to date. But we will still do a few."