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Canada Life to sell closed book life and pension savings policies

26 June 2018

Canada Life UK will sell 155,000 longstanding policies worth £2.7bn from its closed UK book to Scottish Friendly. 

The Scottish mutual has struck an agreement under which Canada Life Investments will continue to manage a substantial portion of the transferring unit-linked assets.

The block of policies has largely been closed to new business since 2003 and is made up of life and pension savings policies, along with some protection policies.

Canada Life said the deal would allow it to concentrate on its core business strategy and develop new retirement products, but did not disclose terms of the sale.

Doug Brown, chief executive officer, Canada Life, said: “This is an excellent move for both organisations, for Scottish Friendly by increasing their scale and for Canada Life to concentrate its resources around its core business strategy. Our priority is ensuring customers receive the highest standards of care both during this transition period and beyond. Scottish Friendly has a great reputation in this area which gives us confidence that customers are in good hands.”

Brown added that it had been a difficult decision for the group, with many customers having been with Canada Life for many years, but said on close evaluation it was “the right thing to do.”

Jim Galbraith, chief executive of Scottish Friendly, commented: “We were delighted to be selected to partner with Canada Life as part of this transaction and look forward to welcoming these new policyholders into Scottish Friendly.

“This activity is a key element of Scottish Friendly’s three-part growth strategy so Canada Life and their policyholders can be confident that the process of change will be as smooth and seamless as possible and can look forward to the friendly and efficient service that Scottish Friendly specialise in.”

The deal marks the second large-scale move by Canada Life in recent months, following its acquisition of Retirement Advantage at the start of the year. The acquisition added over 30,000 pension and equity release customers and more than £2bn of assets under administration including a £1.5bn block of in-force annuities.

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