Pursuing its aggressive
restructuring strategy, Dutch insurer Aegon is to sell its UK-based
Guardian life and pension business to Cinven, a European private
equity firm. The cash deal is worth £275m ($450m) and comes three
months after Aegon’s announcement that it is selling its US-based
reinsurance unit Transamerica Re to French reinsurer SCOR for
$912.5m
(see SCOR snaps up Transamerica
Re).
Guardian, which was established in
1821, manages more than 300,000 life insurance policies in the UK
and has been closed to new business since 2001. Aegon chief
financial officer Jan Nooitgedagt commented that managing
Guardian’s closed business no longer fits Aegon’s strategic
objectives.
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A year ago Aegon announced that its
strategy in the UK is to focus on the at-retirement and workplace
savings markets. Aegon has retained its individual life insurance
and protection business in the UK which it views as supportive of
its strategy in the at-retirement market. Aegon closed its group
risk business in June 2009.
For its part, Cinven views the
acquisition of the Guardian business as its first step into the
UK’s closed life book market.
“Cinven’s financial services team
has invested considerable time into developing its strategy for the
closed life market and believes it [Guardian] represents an
excellent investment opportunity with attractive returns,” said
Cinven partner Caspar Berendsen.
“Guardian is an ideal entry point
for us into the market and provides us with a strong platform from
which to deploy further capital to create a leading closed life
consolidator.”
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By GlobalDataAccording to Aegon, the book value
of the Guardian business stood at £271m at the end of June 2011,
while the embedded value amounted to £322m. Underlying earnings
before tax totalled £23m in 2010.
Under a long-term agreement with Cinven, Aegon Asset Management
will continue to manage Guardian’s assets which total £7.4bn.
