Irish Life & Permanent has reached agreement with Chesnara on the sale of its closed UK life business, City of Westminster Assurance (CWA), for €70m (£47.5m), pending the approval of Chesnara shareholders and the Financial Services Authority in the UK.
Closing of the deal is expected in June.
CWA is a wholly-owned subsidiary of Irish Life & Permanent and is held through Irish Life (UK) Holdings. CWA was originally acquired by the then Irish Life Group in 1993. The book was closed to new business in 1995 and in 1996 the business of Irish Life’s UK Branch was integrated into the company.
In 2004, City of Westminster Assurance reported a pre-tax contribution of €10.1m (£7m). The embedded value of the company at that date was €84.6m (£59.6m) after payment of the dividend in respect of 2004 to Irish Life & Permanent plc of €6.5m (£4.6m). The company has €1.1bn (£770m) in funds under management. Irish Life Investment Managers will continue to manage these funds.
Irish Life & Permanent Group Finance Director Peter Fitzpatrick said that the CWA sale was in line with the group’s Ireland First strategy.
"We’ve been looking at our strategic choices for the company for some time. While we’ve been happy with the financial performance of the business, it had no long term strategic significance for us and therefore, it was incumbent on us to explore other options."
Irish Life & Permanent was advised on the transaction by Hawkpoint Partners Limited.