Chesnara plc (CSN.L), a Life and Pensions Consolidator, Monday announced that it has reached a second portfolio acquisition deal with Canada Life Ltd., known as Canada Life UK, for a closed portfolio of unit-linked bonds and legacy pension business.
The portfolio includes approximately 17,000 policies and 1.5 billion pounds in assets under management as of December 31, 2023.
As an outcome of the acquisition, the policies will move to Chesnara's UK subsidiary, Countrywide Assured, by the end of 2025, pending court approval.
During the period, Canada Life UK will reinsure the management of the portfolio to Countrywide Assured through a reinsurance deal, effective from December 31, 2023. The company will pay 2 million pounds for this agreement, which will be funded from internal Group resources.
The reinsurance agreement transaction is expected to increase Chesnara's Economic Value by at least 8 million pounds, generate 8 million pounds in cash over five years, and slightly lower its Solvency II ratio by about 2 percent.
Chesnara earlier had purchased a different Canada Life UK insurance business in 2023.
Group Chief Executive Steve Murray, "This transaction, the sixth deal implemented in the past three years, will add additional scale to our UK business which now looks after over 300,000 policies, and provides an attractive return on investment for our shareholders."
CSN.L is currently trading 0.14% less at 257.65 pence on the London Stock Exchange.
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