Ageas has agreed to sell its 100 per cent shareholding in its UK life protection arm Ageas Protect Ltd to American giant AIG for a total consideration of £181m, with the transaction expected to complete by the end of the year.
Net proceeds, after costs and the repayment of £26m subordinated debt, will be upstreamed to the general account at Ageas level and the resulting capital gain will be made public on closing of the transaction. The move is subject to regulatory approval.
Ageas Protect was launched in July 2008 and now has a 4.8 per cent share in the total UK individual protection market.
Ageas is primarily a non-life business with over 9m customers and the focus is to develop its general insurance business.
Andy Watson, chief executive of Ageas UK, said: “It was a tough decision for us but ultimately, our main focus in the UK is in developing our businesses in the non-life market where we have considerable scale and hold significant market positions.
“We know that Ageas Protect employees are going to a good home where they can further develop the business.”
Darren Spriggs, managing director of Ageas Protect, said: “We have a strong presence and close relationships with our IFAs, partners, customers and suppliers based on the delivery of award-winning service, systems and processes and that delivery will most definitely continue.
“Ageas has supported us all the way through our growth but we all feel that now is the right time to move to the next stage of our development and we are really excited about the opportunities AIG will create for us.”
Ageas UK’s half year trading update revealed a drop in net profit to £26.3m compared to £49.1m at H1 2013. Total inflows from retail businesses were down 9 per cent at £84.6m due to the “continued competitive environment”.
