UnumProvident will gain 1,025 group IP plans in take-over deal
UnumProvident is to acquire Sun Life Financial of Canada's (SLFoC) UK group income protection (IP) business together with the renewal rights to its UK group life business.
The deal will see Unum receive 1,025 group IP policies covering 140,000 people and renewal rights to 3,750 group life policies covering 871,000 lives.
Susan Ring, UnumProvident's UK chairman and managing director, said: 'It is a financially attractive opportunity and is in line with our strategy to deliver increasing customer value to the UK market.'
The physical handover of the deal, which is still subject to approval by the courts, is expected mid-year. SLFoC said the proceeds of the transaction ' although neither party has disclosed the sum it will amount to ' will be used for general corporate purposes.
Donald Stewart, chief executive at SLFoC, said: 'With the sale of the UK group insurance business, we are continuing our efforts to refine Sun Life Financial of Canada's business profile in order to focus on markets where we are well positioned for future growth.'
Commenting, Nicola Smith, head of communication ' em- ployee benefits ' at rival insurer Swiss Life, said: 'Acquiring another book of business is a good, if costly, method of increasing market share, as opposed to organic growth. Unum wants to increase market share and has shown an out-and-out commitment to it. It is a niche player, and with all the movement in the industry at the moment it shows the market has potential.'
SLFoC's individual life assurance portfolio, which is closed to new business, is not included as part of the deal.
Munich Re is supporting the transaction and will assume a 50% quota share reinsurance arrangement with Unum. SLFoC's 118 staff located in Basingstoke will be absorbed by Unum in the deal.