European life and pensions consolidator Chesnara Plc is acquiring the onshore individual protection business of Canada Life UK for an undisclosed sum.
Closed to new business in November 2022, the book spans approximately 47,000 life insurance and critical illness customers whose policies will be transferred to Countrywide Assured Plc, the UK subsidiary of Chesnara.
“We are delighted to be welcoming these 47,000 protection customers to Chesnara, and they can be confident we will continue to provide high levels of customer service as part of a financially strong group,” Chesnara group chief executive Steve Murray said in a release.
“I am pleased that a company as highly regarded as Canada Life has placed its trust in us to support these customers and look forward to working with the team going forward. This transaction, the fifth deal announced in the last two years, will add additional scale to our UK business and provides an attractive return on investment for our shareholders.”
Murray added that they continue to see a range of mergers and acquisitions opportunities and that they are highly confident in Chesnara’s ability to finance and execute such transactions on attractive terms for all parties.
Meanwhile, Chesnara noted: “Customers’ policies are expected to transfer to Countrywide Assured in 2024, subject to the completion of a court-approved Part VII transfer. In the interim period, Canada Life UK will reinsure the portfolio to Countrywide Assured, effective from December 31, 2022.
“The consideration as part of the reinsurance agreement is £9 million, funded from internal group resources, and we expect the transaction to provide an uplift in the group’s economic value of approximately £7 million and additional cash generation over the next five years of approximately £16 million.”
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