L&G sells mature savings business to Swiss Re in £650m deal

Jenna Towler reports...

Legal & General Group is to sell its closed mature savings business to the ReAssure division of Swiss Re for £650m.

The insurers said the business being sold was largely made up of retail customers who hold traditional insurance-based pensions, savings and investment products. Its assets at H1 2017 of £33bn include both unit-linked business and Legal & General’s £21.4bn with-profits fund.

The firm said the operation has about a million customers and had largely been closed to new business.

Swiss Re’s ReAssure division is a life and pensions business designed to manage closed and non-core in-force portfolios, focusing on delivering excellent service and outcomes to policyholders.

L&G added it was confident the sale would result in positive results for existing clients who would benefit from economies of scale.

L&G said it would look to accelerate its growth in the following areas:

·      Investing & Annuities through Legal & General Retirement and Legal & General Capital;

·      Investment Management through LGIM; and

·      Insurance through Legal & General Insurance and General Insurance

L&G Group chief executive Nigel Wilson said: “This was a difficult decision as with-profits savings has been a part of Legal & General’s UK business for over 50 years.

“However we have in Swiss Re a great partner, who will be an excellent steward of the business and its many customers and policyholders.

“Selling Mature Savings is the right decision for us – another important, measured, step in growing our company and updating our products. It will drive further earnings growth by allowing us to focus on our successful market-leading businesses and to accelerate the scaling up of our growth businesses.”

Legal & General Group is to sell its closed mature savings business to the ReAssure division of Swiss Re for £650m.

He added: “Undersaving, including for retirement, is an economic and social challenge for the UK, and Legal & General remains committed to providing attractive solutions to help our customers achieve their financial goals based around LGIM’s modern workplace savings, personal investment and intermediated product range.”

The £650m profits from the sale will be received by L&G at the start of the new year. Swiss Re will assume economic exposure to the business from 1 January 2018. Formal transfer is expected to be happen in mid-2019, subject to regulatory approval.

Swiss Re has agreed an investment management agreement with LGIM to continue to manage the funds transferred, the business added.