Insurance pair consider Royal merger

The UK’s biggest insurance mutual, Royal London, today unveiled plans for a potential merger with Liverpool-based rival Royal Liver.

Royal London’s approach to Liver, the fourth largest insurance mutual, would create a group with nearly five million members and around £35bn (€51.3bn) in funds under management.

However, Liver’s 1.7 million members are unlikely to gain windfall payouts if the deal goes ahead.

The boards of the businesses are understood to be looking at bringing the two businesses together through a merger of the pair’s long-term insurance funds, with no money changing hands.

Royal London said today that talks over the possible deal were at an “early stage” and that there were no guarantees of a deal.

A spokesman said it was also “too early to say” whether the Royal Liver name would disappear more than 150 years after the company was founded in 1850.

The mutual’s chief executive, Mike Yardley, has been an active consolidator in the sector after buying listed company United Assurance Group for £1.6bn (€2.3bn) in 2000, and mutual Scottish Life for £1.1bn (€1.6bn) a year later.

Royal London is looking to gain efficiency savings from a combination of the duo and give it the increased size to take on listed rivals in the insurance and pensions market. One source close to the deal said: “This is all about scale.”

The combined group would have a total of more than 5,000 staff in the UK and Ireland.