Chesnara plc announces acquisition deal with Canada Life Limited

LONDON: Chesnara plc, a leading European life and pensions consolidator, has struck a significant deal with Canada Life Limited to acquire a closed portfolio comprising unit-linked bonds and legacy pension business, encompassing approximately 17,000 policies and total assets under management of £1.5 billion as of 31 December 2023.

The agreement will see these policies transferred to Chesnara’s UK subsidiary, Countrywide Assured plc (“Countrywide Assured”), by the end of 2025, pending the successful completion of a court-approved Part VII transfer. This latest transaction follows the acquisition of an individual onshore protection business from Canada Life in 2023, further solidifying Chesnara’s presence in the UK life and pensions market.

In the interim, Canada Life UK will reinsure the portfolio to Countrywide Assured, effective from 31 December 2023. The consideration for the reinsurance agreement stands at £2 million, funded from Chesnara’s internal resources. The company anticipates this transaction will enhance its Economic Value by at least £8 million and generate an additional £8 million in cash over the next five years, albeit with a modest initial reduction in the Group’s Solvency II ratio by approximately 2 percentage points.

Steve Murray, Group Chief Executive, commented: “We are pleased to continue our relationship with Canada Life through the agreement of our second recent transaction, following the acquisition of 47,000 protection policies that we announced last year. I am looking forward to welcoming these new customers and their advisors to Chesnara and they can be confident we will continue to provide high levels of customer service as part of a financially strong and growing group.

“This transaction, the sixth deal implemented in the past three years, will add additional scale to our UK business which now looks after over 300,000 policies, 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 vendors, customers and our shareholders.”

Chesnara to acquire Canada Life UK’s Individual Protection Business