Chesnara PLC (LSE:CSN) has agreed to buy from Canada Life UK a closed portfolio of unit-linked bonds and legacy pension business with approximately 17,000 policies and total assets under management of £1.5 billion at end 2023.
The policies are expected to transfer to Chesnara's UK subsidiary, Countrywide (LSE:CWD) Assured at the end of 2025 and will Canada Life UK reinsuring the portfolio in the interim period.
Life and pensions group Chesnara previously bought an individual onshore protection business from Canada Life in 2023.
For this latest deal, Chesnara will pay £2 million as part of the reinsurance agreement, with the benefits expected to be an uplift in Group Economic Value of at least £8 million, £8 million generated cash over a five year period and a two percentage points reduction to the Group's Solvency II ratio,
Steve Murray, Chesnara’s chief executive, said: "We are pleased to continue our relationship with Canada Life through the agreement of our second recent transaction, following the acquisition of 47,000 protection policies last year.
"This transaction, the sixth deal implemented in the past three years, will add additional scale to our UK business which now looks after over 300,000 policies and provides an attractive return on investment for our shareholders.
“We continue to see a range of M&A opportunities and are highly confident in our ability to finance and execute such transactions on attractive terms for vendors, customers and our shareholders."