It was revealed by moneymarketing.co.uk this week that Lincoln National’s UK business will be integrated into Sun Life’s closed book British operations in a deal worth £195m. The Lincoln brand will be replaced by Sun Life Financial of Canada.
The acquisition, expected to complete in the third quarter, will increase Sun Life UK’s assets under management by nearly 60 per cent to £10.6bn and double the number of policies in force to 1.1 million.
But David C Hedge proprietor Dave Hedge believes Lincoln’s service will “almost inevitably” slip. He says: “Sun Life’s admin is rubbish and while Lincoln’s policies are not perfect, they have excellent service and are helpful instead of obstructive. It is a shame.”
But Lincoln head of products and marketing Simon O’Connor says: “It is my expectation that the level of service we offer and the products will continue pretty much as they are. Sun Life singled us out for our marketing and distribution capabilities and, for us, a big part of that is our service offering.”
Sun Life holds closed books of business in life insurance, pensions and annuities. Lincoln says it will continue to promote its i2Live product, its whole-of-life product Financial Foundations, protection product Financial Protection and its unit trust range.
The sale is part of Lincoln’s plans to raise £1.2bn to shore up its capital base, including £578m from the US government’s troubled asset relief programme and the rest coming from issuing new debt and shares.
Informed Choice joint managing director Martin Bamford says: “Both Sun Life and Lincoln are slightly off-centre brands but I think this is a sign of things to come. There is bound to be more consolidation, even among the more mainstream providers.”