Barclays Bank PLC announced on Tuesday that it has agreed to sell Barclays Life Assurance Company Limited to Swiss Reinsurance Company (Swiss Re), for a consideration of approximately GBP753mn, payable in cash.
The sale is expected to be completed by 31st October 2008, after receipt of appropriate regulatory approvals.
Barclays Life is the combined life assurance business of Barclays and Woolwich in the UK, and ceased to accept new customer applications in 2001.
As at 31st May 2008, Barclays Life managed approximately GBP6.8bn of assets in respect of around 760,000 policies, which will transfer with the sale.
The portfolio primarily comprises unit-linked life and pensions policies.
Barclays Life generated approximately GBP350mn in premium income in the financial year to 30th November 2007.
The post-tax gain on the sale for Barclays is expected to be approximately GBP330mn.
Excluding the gain on the sale, the transaction is not expected to have a material impact on Barclays earnings per share. Barclays will continue to sell life insurance products from a selection of third party providers.
Chris Lucas, Group Finance Director, Barclays, explained that:
“Barclays Life is an attractive, high quality business which is not core to Barclays. We are delighted to agree a sale to Swiss Re which is an experienced and reputable partner. We are confident that Swiss Re, with its expertise in this area, will offer policyholders continuity of service and support.”
A comprehensive report in our Intelligence Report series looking at offshore insurance is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report11.asp
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