- Sale of block of UK older policies allows Canada Life to concentrate on core markets
- Further accelerates Canada Life’s strategic push into annuities, wealth management, group and individual protection, and retirement solutions
- Pending approvals including court sanctions, the formal transfer of the business is expected to complete late 2019.
Canada Life UK has agreed to sell a block of 155,000 longstanding policies from its closed UK book with assets of £2.7 billion to Scottish Friendly. The Scottish mutual has agreed an arrangement under which Canada Life Investments will continue to manage a substantial portion of the transferring unit-linked assets. The terms of the deal were not disclosed.
Scottish Friendly, Scotland’s largest financial mutual with a heritage reaching back to 1862, has a proven track record of such transactions having recently completed the transfer and consolidation of the M&GM book of business in June 2016. Both organisations are confident that Canada Life customers will benefit greatly from the established skills, services and scale provided by the enhanced Scottish Friendly group. The mutual has won a series of business and technology achievement awards, including Financial Services Company of the Year in the Scottish Business Awards 2013.
The block of policies being transferred has largely been closed to new business since 2003 and comprises life and pensions savings policies, along with some protection policies all written in the UK.
Subject to the satisfactory completion of certain conditions including court sanction, the transfer will be primarily effected by way of a Part VII transfer under the Financial Services and Markets Act 2000.
It is the second large-scale move by Canada Life in recent months following the acquisition of Retirement Advantage in January 2018, which added over 30,000 pension and equity release customers and more than £2 billion of assets under management including a £1.5 billion block of in-force annuities. Disposing of non-core business will enable Canada Life to build on the integration with Retirement Advantage and develop new retirement products, as well as to further accelerate its push into the following core markets:
- wealth management
- group and individual protection
- retirement solutions markets.
Doug Brown, Chief Executive Officer, Canada Life UK, said:
“This is an excellent move for both organisations, for Scottish Friendly by increasing their scale and for Canada Life to concentrate its resources around its core business strategy. Our priority is ensuring customers receive the highest standards of care both during this transition period, and beyond. Scottish Friendly has a great reputation in this area which gives us confidence that customers are in good hands.
“This was a difficult decision – many of these customers have been with us for years, arriving through acquisition or organic growth. However, following close evaluation it was clear that the sale is the right thing to do.”
Jim Galbraith, Chief Executive of Scottish Friendly, said:
“We were delighted to be selected to partner with Canada Life as part of this transaction and look forward to welcoming these new policyholders into Scottish Friendly. This activity is a key element of Scottish Friendly’s three-part growth strategy so Canada Life and their policyholders can be confident that the process of change will be as smooth and seamless as possible and can look forward to the friendly and efficient service that Scottish Friendly specialise in.”
Canada Life will continue to administer these customer policies until the transfer, which is expected to occur in late 2019, by which time customers will have been contacted with full details regarding the ongoing management of their policies.