Canada Life UK has agreed to sell a block of 155,000 longstanding policies from its closed UK book to Scottish Friendly, as the firm shifts its focus on its core markets of annuities, wealth management and protection.
The sale amounts to £2.7bn in assets and is expected to transfer in late 2019 pending court approval.
Scottish Friendly stated it has agreed an arrangement under which Canada Life Investments will continue to manage a substantial portion of the transferring unit-linked assets.
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.
Doug Brown, chief executive of 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.
“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.”
The sale was the second large-scale move by Canada Life in recent months following the acquisition of Retirement Advantage in January 2018, which added 30,000 pension and equity release customers and £2bn of assets under management.
Canada Life said it wants to build on the integration with Retirement Advantage and develop new retirement products, as well as to further accelerate its push into its core markets: annuities; wealth management; group and individual protection; and retirement solutions markets.
In March Retirement Advantage added seven Canada Life Investment funds to its hybrid drawdown product, the retirement account.
Scottish Friendly, meanwhile, completed the transfer and consolidation of the M&GM book of business in June 2016.
Both organisations said they are confident Canada Life customers will benefit from the move to the Scottish mutual.
Jim Galbraith, chief executive of Scottish Friendly, said: “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.”
carmen.reichman@ft.com
