Scottish Widows is acquiring Zurich’s UK corporate pension business in a deal that sees £15bn of assets and 500,000 customers move to Lloyds Banking Group (LBG).
LBG says the transaction will give Scottish Widows a new flexible workplace savings platform and an enriched customer experience. Scottish Widows currently manages more than £124bn of funds of which £35bn is workplace pensions business.
As part of the deal Zurich will receive exclusive distribution rights for group life protection to certain corporate clients of LBG’s Commercial Banking services.
Zurich says the deal cements its ‘number one position for new sales in corporate protection’.
The Zurich Corporate Savings proposition will broaden Scottish Widows’ participation in the large pension scheme sector across master trusts and group Sipps. LBG says it will also provide a flexible investment capability to support advisers to create bespoke client investments and access assets not previously available via Scottish Widows.
As part of the transaction around 200 Zurich employees – including key management, relationship managers, technical experts and operations staff, located primarily in Cheltenham – are expected to transfer to LBG under a TUPE arrangement.
The acquisition is expected to partially close in the first quarter of 2018, with subsequent completion and transfer of assets following the required regulatory and legal approvals.
Scottish Widows chief executive and LBG director Antonio Lorenzo says: “Today’s announcement is a clear signal of Lloyds Banking Group’s commitment to the financial planning and retirement segment. The acquisition of Zurich Corporate Savings complements Scottish Widows’ growth to date and provides us with an ideal opportunity to accelerate our goal to become a market leader in this important sector for advisers and customers.
“Zurich Corporate Savings is highly regarded and has achieved good growth in assets under administration driven through strong relationships with large-scale corporate clients and their intermediaries. The greater proposition choice created through this acquisition will help us meet adviser and customer demands and ensure we continue to evolve our service proposition so that we are easy to do business with.”
Zurich UK CEO Tulsi Naidu says: “We see today’s announcement as a very positive step forward for our business. We are simplifying our organisation and focusing on markets where we have strong assets and can best serve our customers and distributors. Our UK life and savings strategy is simple – to establish market leading positions in retail wealth, and retail and corporate protection, while growing our new corporate longevity and de-risking business.
“This new exclusive deal with Lloyds Banking Group broadens our corporate protection distribution footprint. To support our other ambitious growth plans, we are also investing in a new multi-million pound retail protection platform and enhancing the range of products on our retail wealth platform.”