Equitable Life has agreed to sell Permanent Insurance to Liverpool Victoria, the largest friendly so...
Equitable Life has agreed to sell Permanent Insurance to Liverpool Victoria, the largest friendly society in the UK, for £150m.
The agreement includes the value of both the existing business and goodwill and is expected to be completed before the end of the first quarter in 2001.
Peter Waller, corporate communications director at Liverpool Victoria, said that the acquisition fits in well with the society's plans for future expansion into the IFA sector. He said: "The IFA protection market is a key component in our growth plans and we do not have an income protection product as such at the moment. Diversification is important to us, and we felt we could add value to Permanent because we already have a strong investment and savings side.
"Ultimately the people who will benefit most are our members because they will have better value products."
Andy Chapman, managing director at Permanent, said that the move represents an excellent opportunity for Permanent to develop using a financially strong parent company. Chapman said: "Liverpool Victoria's ambitions for growth marry up with Permanent's. There is an opportunity for a great synergy - we bring our expertise to their organisation, and they have a strong financial base and experience in other product areas."
Permanent will continue to be based in Exeter and the transaction will not involve any loss of staff. Planned product launches scheduled for the middle and end of 2001 are expected to remain in place. Chapman said: "Outwardly, there is not going to be much change which is good for IFAs because Permanent has had any uncertainty removed from it."
The deal is part of a sell-off plan by Equitable Life which ceased writing new business in December. Following a court ruling earlier in July, the insurer has been left with an estimated £1.5bn liability to cover guaranteed payouts on annuity policies.
l The Office of Fair Trading (OFT) has revealed that it is investigating a claim that Equitable Life broke consumer protection rules by raising the exit penalty from 5% to 10% of the policyholder's fund when the company closed for new business in December.
The OFT has written to the insurer to request a copy of its contract terms to ensure that it is not weighted against the consumer. The investigation is expected to take several weeks.
