Mutual provider LV has agreed terms with Teachers Provident Society, which trades as Teachers Assurance, to take over the business for an undisclosed sum.
It is expected that the deal will complete in early 2016, subject to regulatory and Teachers Assurance member approval. LV said that the transaction will add to its existing customer and member base of 5.5m.
As a result, Teachers Assurance members will join LV and member benefits, including free legal advice, discounts and a member support fund.
Teachers Assurance manages circa £1bn on behalf of its members and policyholders and offers a range of products including with-profits (40,000 policies), life and pensions (32,000 policies) and homes and buildings insurance (13,000 policies).
The deal with LV does not include Teachers Assurance’s unit trust business (19,000 policies). Instead, Teachers Assurance reached an agreement to transfer the business of those funds to Threadneedle Investments.
The deal follows LV’s earlier acquisitions in 2008 and 2007 of Highway Insurance, Britannia Rescue and Tomorrow.
It also follows on from the £5.6bn buyout of Friends Life by Aviva, which was agreed earlier this month, which many said would presage a spate of consolidation by firms across the life and pensions sectors.
Mike Rogers, LV group’s chief executive, said: “We believe Teachers Assurance offers good value to our members and is complementary to our existing business lines where we already have significant scale.
“We already have plans to launch a financial advice service to the teaching profession following this deal.”
Rogers pointed out that Teachers Assurance, also has its head office in Bournemouth and as a result LV hopes to redeploy many of the new employees into the wider LV group when in early 2016.
“We expect the deal to be earnings and cash flow positive within 12 months of completion and the impact on surplus capital is not material. We will be working closely with the current executive team over the coming months to ensure a smooth handover,” he added.
ruth.gillbe@ft.com