Takeover interest for Barclays Life Assurance

A division of Barclays which pays pensions to more than 70,000 policyholders a month was today said to be the subject of takeover interest.

The Sunday Times reported that Swiss Re had been conducting due diligence on Barclays Life Assurance, which looks after policyholders’ life, pension and investment plans. The business has more than £7bn (€8.9m) under management.

As the division no longer writes new business, Barclays is thought to see the operation as non-core and offering the potential to raise cash. Estimates about how much the business might be worth vary from as little as £450m (€571m) to £750m (€951m), the newspaper reported.

Barclays Life Assurance – part of Barclays Wealth – was created in 2003 when Woolwich Life and Barclays Life merged. Both firms stopped accepting new customers in 2001.

There has been a flurry of consolidation activity in the life-book sector, culminating in last year’s £5bn (€6.3m) takeover of Clive Cowdery’s Resolution group by Pearl Assurance.

Swiss Re missed out in the battle for Resolution but was last year successful in buying a fund from Zurich Financial Services with nearly £4bn (€5bn) under management.

Specialist buyers increase the returns of the funds by putting the liabilities together and stripping out administrative costs.