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Move to sell off £4bn closed annuity business

Zurich is looking to sell its closed book of annuity business.

Bids for the business, valued at just under £4bn, were lodged with Zurich’s advisers at Lehman Brothers last week.

Commentators say Prudential, Aegon and Aviva are the leading contenders for the business although all three have refused to comment while Synesis Life, also touted, was unavailable for comment.

Zurich says any sale will not affect advisers as the firm has not marketed its annuity business since 2005 and annuities are not a core part of its offering. It says current terms and conditions will continue to apply to existing customers.

Zurich completed a deal with Prudential in March that saw it pass on customers with maturing Zurich pension plans to Prudential as the first step of its move away from annuity business.

A Zurich spokesman says: “As part of our ongoing efforts to create business value, Zurich has decided to explore the possibility of selling our book of annuity business.”

Origen head of annuities Nick Flynn says: “This kind of deal is becoming commonplace. Given the volume and value, the competition for this business is going to be hot.”

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