The transaction will represent LCCG’s first acquisition in the UK and is expected to form the platform for further acquisitions in the UK.
The new life insurer will not compete with Utmost Wealth Solutions, LCCG’s Isle of Man-based life company, Mark Goodale, chief executive of Reliance Mutual told International Adviser.
“That’s a different part of their business,” he said. “This particular life company is going to be a UK life business, regulated by the PRA and authorised by the FCA.
“We’re not in the same markets at all. Our new business is very low now. We’re not a closed book but we are close to it.
“We’re a mutual that has been around for over 100 years and we’ve sold very much to people with basic insurance needs. We have a lot of relatively small personal pension policies and quite a lot of annuities on the books,” Goodale said.
LCCG has existing operations in the Republic of Ireland and the Isle of Man, having previously acquired seven businesses, including from Aviva and Axa.
The acquisition is subject to member, regulatory and court approvals and is expected to be completed by end of 2017.
LCCG agreement
Under the proposed agreement it is expected that:
- Reliance Mutual’s members will receive a one-off payment dependent on policy size to compensate for loss of membership rights;
- Members with voting rights will also receive an additional fixed payment compensating them for the loss of their voting rights;
- Policyholders will benefit from enhanced security as a result of LCCG’s agreement to capitalise the new life company at a level, which is materially in excess of Reliance Mutual’s current capital position;
- With-profits policyholders will benefit from reduced exposure to ongoing operating expenses and the transfer of all liabilities relating to the Reliance Pension Scheme; and
- Two of Reliance Mutual’s non-executive directors will join the Board of the new life company to provide continuity of oversight for all transferring policyholders.
