Lloyds Banking Group has bought protection advice firm Cavendish Online for £12mn as part of its plan to become “a top three protection provider by 2025”.
In an announcement today (June 15), the bank said Cavendish Online is a hybrid advice business, offering direct-to-consumer, guided and advised life insurance, critical illness and income protection services.
Cavendish Online - not to be confused with fellow protection firm Cavendish Ware - will become a wholly owned subsidiary of Scottish Widows Group.
Subject to regulatory approvals, the acquisition is due to complete sometime in the last three months of this year.
The advice business will, however, continue to operate as a separate company out of Exeter and Fareham, offering insurance broker services to customers through its existing distribution channels, the bank said.
Meanwhile, Lloyds will continue to offer mortgage-focused protection advice in its branches, and Scottish Widows-branded protection products through independent financial advisers.
“The acquisition of Cavendish Online will enable Lloyds Banking Group to better support existing Halifax, Lloyds Bank and Bank of Scotland customers’ protection needs by providing advice and guidance at key moments,” the bank said today.
In February, the bank published its full-year financial results in which it admitted there were opportunities to leverage Lloyds’ scale to grow in “under-represented intermediary products” - including protection, individual pensions and investments.
It pledged to spend £4bn over the next five years on these sectors, laying out its aim to capture market share and become a top three protection provider by 2025.
The bank’s protection director, Rose St Louis, said the acquisition of Cavendish Online will enable Lloyds to provide advice and guidance to “a broader range of customers, who are unlikely to access protection through an IFA, using the channel that best suits them”.
She said the deal would also complement the bank’s existing mortgage focused in-branch service.”
“Protection can be a tricky conversation, often triggered by key events in peoples’ lives and many people value discussing their options with someone, to make sure they’ve got the right cover for their specific circumstances,” she added.
Scottish Widows’ chief executive and Lloyds’ group director of insurance and wealth, Antonio Lorenzo, said the deal represents an opportunity to improve Lloyds customers’ financial resilience.
“60 per cent of UK adults have no form of life cover and just 12 per cent have cover if they fall critically ill,” he explained.
“Our acquisition of Cavendish Online will enable us to help more of our customers at the times when we know they value advice.”
Cavendish Online’s director, John Nelmes, founded his firm in 2000.
“Our goal has always been to relentlessly pursue customers’ best interests through the provision of simple, affordable and accessible protection products and advice,” he said.
“That’s why we are looking forward to working together with Lloyds Banking Group to grow our business and ultimately help protect more UK families.”