AUS
NZ
UK
CA
USA
IND
Highlights:
- Acquisition Details: Chesnara acquires a closed portfolio of unit-linked bonds and legacy pensions with 17,000 policies and £1.5 billion in assets.
- Interim Management: Canada Life will reinsure the portfolio until the official transfer to Chesnara's subsidiary in 2025.
- Strategic Growth: The deal boosts Chesnara's UK operations to over 300,000 policies and enhances group economic value.
Chesnara PLC (LSE:CSN) has announced the acquisition of a closed portfolio of unit-linked bonds and legacy pension business from Canada Life UK. The portfolio, encompassing approximately 17,000 policies and £1.5 billion in assets under management as of the end of 2023, represents a significant step in Chesnara’s growth strategy.
Details of the Transaction
The acquired policies will officially transfer to Chesnara’s UK subsidiary, Countrywide Assured, by the end of 2025. In the interim, Canada Life will reinsure the portfolio, ensuring continuity for policyholders. Chesnara has agreed to pay £2 million as part of the reinsurance arrangement.
This acquisition follows Chesnara’s purchase of an individual onshore protection business from Canada Life in 2023, underscoring the strong partnership between the two entities.
Financial and Strategic Impacts
The transaction is expected to generate several benefits for Chesnara, including:
- Economic Value Uplift: An increase of at least £8 million in Group Economic Value.
- Cash Generation: An additional £8 million in cash over five years.
- Solvency Ratio Improvement: A two-percentage-point reduction in the Group's Solvency II ratio.
Chesnara’s chief executive, Steve Murray, emphasized the strategic importance of the deal:
“We are pleased to continue our relationship with Canada Life through this transaction. It adds significant scale to our UK business, which now manages over 300,000 policies, while delivering attractive returns for our shareholders.”
A Continued Focus on M&A Opportunities
This acquisition marks Chesnara’s sixth deal in three years, further solidifying its position as a key player in the UK life and pensions market. Murray highlighted the company’s ongoing commitment to mergers and acquisitions, stating:
“We see a range of opportunities in the market and remain confident in our ability to finance and execute transactions that benefit vendors, customers, and shareholders alike.”
Future Prospects
With this latest acquisition, Chesnara continues to strengthen its operational scale and financial performance, positioning itself for sustained growth. The successful integration of the portfolio is expected to enhance shareholder value while maintaining a strong focus on customer service.
As the policies transition under Chesnara’s management, the group remains focused on exploring further opportunities to drive long-term profitability and market presence.
