Legal & General has agreed to sell its general insurance business to Allianz Holdings for £242 million (€274 million), the company has announced.
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia.
The proposed transaction, which is subject to customary regulatory approvals, is expected to complete in the second half of 2019.
The financial consideration from the proposed sale consists of a base price of £242 million payable at completion and potential further payments over a three-year period from ongoing commercial arrangements.
The proceeds from the deal will be reinvested in Legal & General’s growing core businesses.
The business being sold comprises principally retail customers who hold household insurance policies. In 2018, gross written premiums were £410 million and operating profit was nil.
Legal & General said it was confident that selling the business to one of the world’s largest property and casualty insurers would mean that customers “can trust they are in safe hands”.
Programme of disposals
The sale of the business is the latest in a programme of disposals in recent years across the group’s non-core businesses, including its historic savings businesses, and its international insurance businesses in the Netherlands, France and India.
These disposals have generated proceeds in excess of £1.5 billion.
Legal & General chief executive Nigel Wilson said the sale was the "right decision for our customers and shareholders".
“I would like to take this opportunity to thank our colleagues for their contribution to Legal & General,” he said. “We continue to focus on delivering against our strategy, allocating shareholders’ capital rigorously.
“We are market leaders in 10 UK markets and have a growing presence in the USA and an emerging presence in Asia.
“Deploying capital in these businesses will deliver better outcomes for all our stakeholders. Our GI customers will benefit from the strength and capability of Allianz in the household insurance sector.”
Allianz UK chief executive Jon Dye also welcomed the deal. "This is a good outcome for all the parties involved and acquiring a high-quality business with two million customers to combine with the LV= general insurance business is a strong result," he said.
“The Allianz Group has worldwide insurance experience, is robustly capitalised and has a strong reputation for customer service and these strengths will be applied to grow the business.”
The Allianz Group is one of the world’s leading insurers and asset managers with more than 92 million retail and corporate customers that benefit from a range of personal and corporate insurance services, including property, life and health insurance.
