Chesnara has closed the HSBC Life (UK) protection arm to new business due to the market’s “competitive nature” and strategic objectives, following completion of its £260m purchase today.
However, the HSBC Life offshore bonds business also bought in the transaction will remain open to new customers.
Health & Protection understands around 230 staff have transferred over as expected with there being no immediate job losses in this group, although it is also too early to say if there will be any future changes.
In a statement shared with Health & Protection, the firm said: “We have been working closely with HSBC Life (UK) in recent months to evaluate the best long-term approach to new business.
“Chesnara has determined that under its ownership HSBC Life will continue to write new business for onshore bonds, a product that Chesnara already knows well, and we see exciting opportunities through the combination of our two onshore bond capabilities.
“We have also decided, following a detailed review, to close the protection offering to new business.
“Given the competitive nature of the protection market and our strategic objectives, Chesnara believes this is the right decision and will work closely with those impacted to consult on next steps.”
Announcing the completion on the London Stock Exchange, Chesnara said “there has been no material change affecting any matter contained in the acquisition announcement”.
Chesnara group chief executive officer Steve Murray added: “We are delighted to have completed the acquisition of HSBC Life UK, our fifteenth and largest acquisition to date, and to formally welcome its customers and colleagues to Chesnara
“Bringing HSBC Life UK into Chesnara increases our scale in the UK market, supports long-term cash generation and, as previously announced, enhances the group’s dividend.
“We also remain optimistic about our ability to undertake further value-accretive acquisitions as opportunities arise, consistent with our strategy.”
432,000 protection customers
The deal was first announced on 3 July as the group’s largest transaction to date with approximately £4bn of assets under administration and approximately 454,000 policies being acquired by Chesnara with approximately 432,000 being protection products as of 31 December 2024.
The move to close the protection business may come as a surprise to the market as it has remained open and has been updating products since the deal was announced.
Later in July, Health & Protection reported that Chesnara was considering the possibilities of retaining the protection insurance new business operations of HSBC Life UK when it took over the firm.
Sources close to the deal told Health & Protection that the Chesnara Life UK brand will be used for the business.
