A division of Barclays which pays pensions to more than 70,000 policyholders a month is to be sold in a deal worth £753m (€950m), it was announced today.
Swiss Re said it will acquire around 760,000 life insurance and pension policies and annuity contracts, representing around £6.8bn (€8.6bn) in invested assets, through the takeover of Barclays Life Assurance.
Barclays Life, which is the combined life assurance operation of Barclays and Woolwich in the UK, has been closed to new business since 2001 but still generates annual premium income of £350m (€441m).
There has been a flurry of recent consolidation activity in the life-book sector, culminating in last year’s £5bn (€6.3bn) 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.
Today’s deal is expected to be completed by October, following the receipt of various regulatory approvals.
Barclays finance director Chris Lucas said: “Barclays Life is an attractive, high quality business which is not core to Barclays. We are delighted to agree a sale to Swiss Re which is an experienced and reputable partner.”
The transaction will provide further scale for Swiss Re’s Admin Re business, which acquires closed books of life and health policies that have been placed into run-off.