Chesnara to Acquire £1.5 Billion Unit Linked Bonds and Pension Portfolio from Canada Life

December 23, 2024 07:08 PM AEDT | By Team Kalkine Media

Chesnara to Acquire £1.5 Billion Unit Linked Bonds and Pension Portfolio from Canada Life — Image source: shutterstock

Transfer and Reinsurance Agreement

The policies will be transferred to Chesnara's UK subsidiary, Countrywide Assured plc (Countrywide Assured), by the end of 2025, following a court-approved Part VII transfer. In the interim, Canada Life UK will reinsure the portfolio to Countrywide Assured, with the reinsurance agreement effective from December 31, 2023. The consideration for the reinsurance is set at £2 million, which will be funded from Chesnara’s internal group resources.

Positive Financial Impact

This acquisition is expected to result in a positive financial impact for Chesnara, with the deal anticipated to provide an uplift of at least £8 million in the Group’s Economic Value. Additionally, the transaction is expected to generate £8 million in cash over the next five years. While there will be a small initial reduction of approximately 2 percentage points to Chesnara’s Solvency II ratio, the acquisition strengthens the Group's long-term financial position.

Previous Acquisition and Continued Growth

This acquisition follows Chesnara's earlier purchase of an individual onshore protection business from Canada Life in 2023. Together, these strategic moves align with Chesnara’s continued expansion in the life and pensions sector, further solidifying its position in the market and enhancing its asset base.

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