This development comes as a sequel to a fierce battle in late-2007 for control of Resolution Life between closed life insurance fund manager Pearl Group and UK Standard Life which ended in victory for Pearl.
For Royal London, Pearl’s partner in the bid for control of Resolution, the spoils of victory were the new individual life protection business operations of two Resolution units, Phoenix Life Assurance and Scottish Provident.
These came at a cost of £1.25 billion ($2.46 billion) to Royal London which also provided £300,000 of the debt funding required to finance Pearl’s offer for Resolution. Royal London’s acquisition of the Phoenix Life and Scottish Life businesses and assets was completed at the end of July 2008. These acquisitions brought with them 1.25 million additional policyholders, increasing Royal London’s total customer base to over 4 million people of which over 1.1 million have life protection plans.
Scottish Provident will continue to operate as a separate brand alongside Royal London’s existing specialist protection brand, Bright Grey.
Phoenix Life focuses on the distribution of protection products via the branches of UK bank Abbey, a unit of Spanish bank Grupo Santander.
“We have now reached an important landmark in the implementation of Royal London’s strategic plans in the protection market,” said CEO Mike Yardley.
“Having three specialist businesses, each with a very strong proposition and successful track record, enables us to significantly increase our presence in the UK protection market.”
Yardley continued that the three protection businesses recorded total new annual premiums of almost £90 million in 2007. This represented a combined share of over 10 percent of the UK’s individual life protection market.
In total, Bright Gray and Scottish Provident secured over 18 percent of individual protection new business through intermediaries in 2007, which would have ranked as one of the top two providers.
