Royal London is aquiring Aegon UK’s individual protection line of business as the insurer is exiting this part of the market.
A statement from Aegon said the sale supported it’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”.
Neither insurer revealed the financial terms of the agreement.
However, Aegon added that the transaction was not expected 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.
Aegon closed its book to new business today.
Following the acquisition the life insurance, critical illness and income protection policies for more than 400,000 customers will transfer to Royal London.
The mutual revealed customers’ policies are expected to transfer to Royal London in 2024, following the completion of a court-approved Part VII transfer. In the intervening period, Aegon UK will reinsure the portfolio to Royal London.
Royal London added there was no immediate change for customers or their advisers, with all servicing and claims continuing to be processed in the usual way.
The two organisations also committed to providing updates to customers and financial advisers as the acquisition progresses.
Barry O’Dwyer, group chief executive at Royal London, (pictured) said: “We are delighted to be welcoming over 400,000 new protection customers and their advisers.
“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.
“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.”
Commenting on the deal, Phil Jeynes, director of corporate strategy at Reassured, said: “Any insurer leaving the market is never good news and my thoughts are with anyone fearing for their job.
“In terms of product and strategy, Aegon have seemed directionless for a while now and therefore this acquisition is not a massive surprise, particularly since Royal London had been open about its appetite following the attempt to buy LV=.”