Legal & General has sold its with-profits savings business to reinsurance group Swiss Re’s ReAssure division for £650million.
Zurich-based Swiss Re’s ReAssure arm will take on around one million of Legal & General ‘s retail customers holding the group’s pension, savings and investment products.
Having sold its mature savings arm, Legal & General said it planned to plough money into expanding its investing, investment management, annuities and insurance operations.
Sold: Legal & General has sold its mature savings business to reinsurance group Swiss Re’s ReAssure division for £650million
Legal & General’s mature savings business has £33billion worth of assets under management, but is largely closed to new business.
Nigel Wilson, Legal & General’s chief executive, said: ‘This was a difficult decision as with-profits savings has been a part of Legal & General’s UK business for over 50 years.’
He added: ‘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.
‘Under-saving, 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.’
Legal & General’s sale of its mature savings arm is the latest of a number of asset sales by the company in the last few years.
In April, the group sold its Dutch division and in August last year offloaded its Cofund platform to Aegon.
In 2015, Legal & General sold its Irish, Egyptian and French businesses.
Legal & General’s share price is down 0.78 per cent today to 261.95p.
Commenting on the sale to Swiss Re’s ReAssure division, Shore Capital analyst Eamonn Flanagan said: ‘This disposal by Legals is consistent with the group’s emphasis on rationalising its operations, modernising its products and focusing on its key markets.
‘We view this deal as smart, opportunistic and entirely consistent with the group’s strategy as regularly elucidated by the CEO.’
In August, Legal & General posted a 27 per cent increase in operating profits to £988million for the first half.
The group’s assets under management climbed 13 per cent to £951billion.
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