LONDON, UK: Chesnara plc, the European life and pensions consolidator, today announced that it has reached an agreement with Canada Life UK to acquire its onshore individual protection line of business, which was closed to new business in November 2022.
As a result of the acquisition, the life insurance and critical illness policies for approximately 47,000 customers will transfer to Chesnara’s UK subsidiary, Countrywide Assured plc (“Countrywide Assured”).
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 31 December 2022.
The consideration as part of the reinsurance agreement is £9 million, funded from internal Group resources, and company expects 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. The impact on the Group’s Solvency II ratio is expected to be broadly neutral.
Steve Murray, Group Chief Executive, commented: “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. 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. We continue to see a range of M&A opportunities and are highly confident in our ability to finance and execute such transactions on attractive terms for both vendors and our shareholders.”
Chesnara was advised by Burness Paull and Canada Life was advised by Herbert Smith Freehills.
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