Aegon to sell closed life business Guardian
Aegon is to sell its UK-based Guardian life and pension business for £275m to European private equity group Cinven.
Guardian, which manages over 300,000 life insurance policies in the UK, has been closed to new business since 2001. Aegon will continue to manage the £7.4bn of assets of Guardian.
Guardian employs around 170 people and most employment arrangements will be transferred to the buyer upon completion of the sale.
Aegon’s chief financial officer Jan Nooitgedagt says: “Consistent with actions over the past three years to dispose of, or run-off, certain businesses deemed non-core, Aegon has concluded that managing the closed business of Guardian companies no longer fits with our strategic objective. We remain committed to the UK and to maximising the opportunities of Aegon’s chosen markets,Workplace Savings and At Retirement, which includes individual protection.”
The book value of the Guardian business amounted to £271m as per June 30 2011, while the embedded value amounted to £322m. Underlying earnings before tax was £23m in 2010.
The transaction is expected to close in the fourth quarter of 2011 and is subject to regulatory approval.