Scottish Friendly seals ‘landmark’ Canada Life deal
Scottish Friendly has seen its assets under management almost double to £5 billion following the completion of a “landmark” acquisition.
The deal to take on life and pensions policies from financial services provider Canada Life will see the number of members at the Glasgow-based mutual increase by 127,000 to some 700,000.
Scottish Friendly said the previously flagged acquisition followed a strategic review by Canada Life’s UK operations and the launch of a competitive tender process to take on the business.
Products transferring across as part of the transaction include endowments, whole-of-life policies, investment bonds and pensions and protection policies, chiefly written before 2003.
Jim Galbraith, chief executive of Scottish Friendly, said: “This is a landmark acquisition for Scottish Friendly and helps to consolidate us as a leading mutual and a significant player in UK financial services.
“It forms part of our three-pronged strategy of organic growth, business process outsourcing for partners and mergers and consolidation, delivering the strongest possible growth and customer care for our members.”
Richard Priestley, managing director and executive director, insurance division, Canada Life UK, added: “This is an excellent move for both organisations; for Scottish Friendly by increasing their scale and for Canada Life to concentrate its resources around its core business strategy.
“Our priority in this transfer was ensuring customers receive the highest standards of care both during this transition period, and beyond. Scottish Friendly has a great reputation in this area which gives us confidence that customers will be in good hands.”
The Scottish mutual, which can trace its roots back to 1862, has a history of acquiring large books of insurance business, most recently from Mobius Life, in 2018.
In April, Scottish Friendly posted rising revenues amid record annual figures, as demand for investment savings products soared in 2018.
Total sales hit the second-highest level in the group’s history, reaching £38.6 million annual premium equivalent (the industry standard measure of regular premiums plus one tenth of single premiums) in the year to 31 December.
The mutual reported particularly strong demand for its branded investment Isas (individual savings accounts), with sales up 27 per cent to £12.1m. It pointed to direct marketing and e-business channels as driving take-up of the savings vehicles, also known as stocks and shares Isas.
The group also hailed record membership numbers of 594,000 while assets under management grew by 3.7 per cent, boosted by the acquisition of the £320m Mobius Life book of business in November.
Established as the City of Glasgow Friendly Society, its name changed in October 1992 when it took over Scottish Friendly Assurance.