International financial services group Aegon is selling its UK individual protection book to Royal London for an undisclosed amount.
“The transaction supports Aegon’s strategy to focus on the core retail and workplace platform activities in the United Kingdom, as part of the ambition to create leading businesses in its chosen markets,” said the Netherlands-headquartered group in its announcement.
“Under the terms of the agreement, Aegon UK will initially reinsure the portfolio to Royal London, followed by a Part VII transfer of the legal ownership of the individual protection book in 2024. The transfer is subject to court approval.”
The divested portfolio, which closed to new business on April 4, consists of life, critical illness, and income protection policies for 400,000 high net worth individual customers.
“We are delighted to be welcoming over 400,000 new protection customers and their advisers,” commented Royal London group chief executive Barry O’Dwyer in a separate release. “Combined with over 900,000 existing customers who already trust Royal London to protect their families against life shocks, this transaction strengthens our position in the UK protection market.
“Our reputation for outstanding customer service means that customers and advisers will be reassured that they are in safe hands. The advised nature of Aegon’s individual protection customer base makes it a perfect strategic fit.”
Described as the biggest life, pensions, and investment mutual in the UK, Royal London has offered assurances that advisers’ businesses and clients will not be disrupted over the course of the switch from Aegon UK.
“We are strong champions of the adviser community and of impartial advice, and we look forward to supporting advisers through this transaction, making sure there is no disruption to their businesses or to their clients,” declared O’Dwyer.
It was noted that there will be no immediate change for customers or their advisers, and that all servicing and claims will continue to be processed in the same way. Updates will be provided as the acquisition progresses, according to Royal London.
Meanwhile, Aegon is not expecting the sale to have a material financial impact on the capital position and operating capital generation of Aegon UK and its main insurance legal entity, Scottish Equitable Plc.
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