View more on these topics

R&SA ready to sell its life and fund business for£2bn

Royal & Sun Alliance is understood to be gearing up to start offering its life and fund management business for sale to rivals, with a£2bn price tag.

The outcome of the review of its life business is expected next week, according to a senior industry source. This report will then be used as a sale document to offer the business to potential buyers.

The sale is expected to be a limited auction with only five bidders. The auction process is likely to begin in August.

Aegon is thought likely to be a major player in the bidding. It is known that talks between the companies have already taken place.

The review is expected to show a need to strengthen the life business&#39s solvency substantially. R&SA has a significant exposure to guaranteed annuities. In 1999, R&SA had to reserve£448m for guarantees and its Sun Alliance & London fund had£616m of guarantees.

But the fund management arm, which has£40bn under management, and R&SA&#39s strengths in the group protection market should prove attractive.

Money Marketing revealed in March that investment bankers had been called in to start valuing the life business as a separate operation to the general side. R&SA then confirmed that a review of the life business was taking place.

Cazalet Financial Consult-ing principal Ned Cazalet says: “The sensible plan would be to sell the business in one go. It would give the purchaser a mass of business. An existing player would get economies of scale, particularly in the stakeholder market. But the guaranteed annuity liabilities are not insignificant.”

R&SA spokesman Paul Atkinson says: “We do not comment on speculation and we are not going to comment further on the review until it is more appropriate. The next time that an update is likely is when our half-year results come out in August. We are looking at a range of options, of which a sale is one.”


Royal London moves to stop baggers

Royal London is bringing in carpetbagger prevention measures to stop new policyholders claiming windfalls if it demutualises. From July 1, when Scottish Life&#39s business will transfer to Royal London, new policy-holders will not be entitled to compensation for loss of membership rights after demutualisation.

Share of the profits

The new all-employee share ownership plan, as I described last week, is founded on three main types of share – free shares, partnership shares and matching shares.There are also shares that can be acquired with dividends paid out on the other three types of share.The plan may provide that all cash dividends are reinvested either […]

FSA wins award for clear letters

The FSA has been awarded a Clear English Service award from the Plain Language Commission for its correspondence. Letter-writers from its correspondence unit went on a nine-month coaching programme with the Plain Language Commission. The clarity, grammar and punctuation of more than 200 letters were assessed.The FSA deals with around 3,000 letters a year.

Standard Bank Offshore widens choice

Standard Bank Offshore has introduced a fund of funds for offshore investors who have a cautious attitude towards risk.The cautious fund aims to produce capital growth and is denominated in either sterling or US dollars. Half of the portfolio is made up of bonds and the rest goes into stocks and shares and cash.The fund […]

Pensions - thumbnail

Auto-enrolment — don’t leave it too late…

With auto-enrolment (AE) well under way for the UK’s largest businesses, over the next three years an additional 800,000 smaller employers (with less than 60 employees) will start their journey to comply with the legislation. AE mandates all eligible employees and their respective employers to make regular pension contributions into a qualifying pension scheme. To learn more about the legislation read our brief Jelf AEase — simple steps to AE compliance guide.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm