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Highlights
- Strategic Acquisition: Chesnara agrees to acquire a £1.5 billion portfolio of unit linked bonds and legacy pension business from Canada Life UK.
- Reinsurance Agreement: The portfolio will be reinsured to Chesnara's subsidiary, Countrywide Assured, from December 31, 2023, until the transfer is completed in 2025.
- Financial Impact: The deal is expected to generate at least £8 million in cash over five years and provide an uplift of £8 million to Chesnara’s Economic Value.
Chesnara plc (LSE:CSN), a European life and pensions consolidator, has announced a significant agreement to acquire a closed portfolio of unit linked bonds and legacy pension business from Canada Life Limited (Canada Life UK). The portfolio, which includes approximately 17,000 policies, holds total assets under management of £1.5 billion as of December 31, 2023.
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.
