UK insurance giant to sell its home insurance business to Allianz
Legal & General has sold its home insurance business to German rival Allianz in a deal worth £242 million.
The two firms had been in exclusive discussions for months over the deal, with Allianz keen to expand its presence in the UK.
According to L&G, the insurance business is mainly made up of home insurance policies, with gross written premiums of £410 million in 2018, although it failed to make any operating profits.
L&G, which has 35 underwriters based in its Edinburgh office at Atholl Crescent, said in 2018 gross written premiums were £410 million, but there was no operating profits.
In 2017 Allianz made its first major foray into the British insurance market, buying a 49% stake in LV's general insurance business in a £713 million deal which made the German company the third-biggest insurer in the market.
L&G is focusing more heavily on its investment business, which was responsible for investing £1 trillion on behalf of investors last year, and has been shedding non-core and overseas assets. These include selling savings businesses Mature Savings, Cofunds and Suffolk Life, alongside international insurance businesses in the Netherlands, France and India.
L&G said the money from the sale will be reinvested into its core businesses.
CEO of Legal & General, Nigel Wilson said selling the General Insurance business is the right decision for their customers and shareholders. He thanked their GI colleagues for their contribution to Legal & General.
Wilson said they continue to focus on delivering against their strategy, allocating shareholders' capital rigorously. They are market leaders in ten UK markets and have a growing presence in the USA and an emerging presence in Asia. Deploying capital in these businesses will deliver better outcomes for all the stakeholders. Their GI customers will benefit from the strength and capability of Allianz in the household insurance sector.
Jon Dye, CEO of Allianz UK said this is a good outcome for all the parties involved and acquiring a high quality business with 2 million customers to combine with the LV General Insurance business is a strong result. The Allianz Group has worldwide insurance experience, is robustly capitalised and has a strong reputation for customer service and these strengths will be applied to grow the business.