Quilter to sell life assurance arm for £425m as it reports operating loss
Asset managers Quilter Plc has announced that it intends to offload its life assurance business to ReAssure for £425m, as it reports a £40m operating loss.
The figures
Quilter reported a first-half operating loss of £40m, but said adjusted pre-tax profits rose 5 per cent to £115m.
£26m of Quilter’s profits came from Quilter Life Assurance (down from £27m for the same period last year), which the firm intends to sell to the UK’s sixth biggest life insurancer, ReAssure, for £425m. Quilter said the deal is expected to be closed later this year, subject to regulatory approval.
ReAssure’s owner Swiss Re said the acquisition will add over 200,000 policies and £12bn of assets to ReAssure’s platform.
Assets under management and administration at Quilter rose eight per cent during the first half to £118.4bn.
Quilter also announced an interim dividend of 1.7p per share.
Quilter’s shares were down 0.71 per cent to 139p shortly after open, down from 140p at yesterday’s close.
Why it’s interesting
Quilter will be hoping that offloading its life assurance arm will help streamline its business amid continued
Quilter, which is part of the FTSE 250, was formerly known as Old Mutual Wealth Management Limited. It rebranded as Quilter and announced its intention to list as a public company in 2017.
ReAssure’s acquisition will be a much-needed boost for the firm, coming shortly after parent company Swiss Re shelved a proposed £3bn floatation of its UK firm.
Swiss Re said at the time that it had cancelled the IPO last month due to “heightened caution and weaker underlying demand in the UK primary market from large institutional investors.”
What Quilter said
In a statement released with the results, Quilter chief executive Paul Feeney called the results “solid”.
“We are focussed on making Quilter a simpler, more efficient wealth management business, and the announcement today of the sale of Quilter Life Assurance is a further significant step forward in this regard.”
Feeney added that “gross new business sales have held up well at £6bn” amid “the uncertain political environment in the UK”.
Main image credit: Quilter.