Legal & General Group has agreed to sell its Mature Savings business to Swiss Re for £650m.
The business being sold comprises principally retail customers who hold traditional insurance based pensions, savings and investment products.
Its assets at half-year 2017 stood at £33bn including both unit-linked business and Legal & General's £21.4bn with-profits fund. With around 1 million customers, it has largely been closed to new business.
Legal & General's focus now will be on Legal & General Investment Management's workplace pension business which now has approximately 2.5 million customers, through its intermediated retail savings business and through its personal investing unit which offers ISAs and Unit Trusts directly to customers.
The £650m proceeds, to be satisfied in cash, will be received by Legal & General at the start of January 2018 and all profits and transfers for the 2017 financial year will be retained by Legal & General.
Swiss Re will assume the economic exposure of the business from 1 January 2018 via a reinsurance structure. It is expected that the formal transfer of the business will be completed in mid-2019, subject to satisfaction of normal conditions for a transaction of this type including court sanction.
During 2016 the Mature Savings business generated £105m operating profit. The net proceeds of the transaction will be reinvested in Legal & General's core businesses.
Commenting on the sale, Nigel Wilson, Chief Executive Officer of Legal & General Group, said: "This was a difficult decision as with-profits savings has been a part of Legal & General's UK business for over 50 years. Selling Mature Savings is the right decision for us - another important, measured, step in growing our company and updating our products.”