Charles Taylor plchas agreed to acquire a closed book of international life assurance business

Posted: 22nd November 2016 08:35

Charles Taylor announces today that it has agreed to acquire a closed book of international life assurance business from Zurich International Life Limited and Allied Dunbar International Fund Managers Limited from Zurich Insurance Company Ltd.

The acquisitions are part of Charles Taylor's strategy to make tactical acquisitions in the international life insurance sector to grow its life insurance business and associated services.  The transaction will enable Charles Taylor to increase its revenue by managing the closed book and by providing policy administration services.  The acquisition of ADIFM, which manages a collective investment scheme, will also enable Charles Taylor to generate fund management revenues and further extend its range of professional services by entering the international fund administration services market. 

It is intended that a subsidiary of Charles Taylor will acquire ADIFM and that Charles Taylor's wholly-owned Isle of Man life insurance subsidiary, LCL International Life Assurance Company Limited, will reinsure the Book and subsequently accept the legal transfer of the majority of the Book, subject to regulatory and court approval.

The initial consideration, payable at completion which is expected in early 2017, is estimated at £2.5m, to be met from existing cash resources.  A subsequent estimated payment of £1.5m will be made in the second half of 2017.  The total consideration is estimated to be £4.0m. The relevant gross assets of ADIFM and the Book were £323.0m as at 30 June 2016.  There are no separately identifiable historical revenues or profits attributable to the assets being acquired; Charles Taylor estimates the Book's current annual revenue to be £3.6m and profit to be £1.7m.

This acquisition, together with recent acquisitions and business developments, is expected to support the Group's earnings growth, although this is now anticipated to be somewhat lower than the market's previous expectations for 2017.  It also enables the Group's ongoing investment in its major initiatives, and offsets the potential of the global claims environment remaining benign into 2017.

This announcement constitutes Inside Information within the meaning of article 7 of the EU Market Abuse Regulation.

David Marock, Group Chief Executive Officer, Charles Taylor said:

"This agreement to acquire the closed life assurance book from Zurich follows our purchase last year of Scottish Widows International.  It demonstrates our commitment to grow our life insurance and servicing businesses in the Isle of Man.  Over the last five years we have made five life insurance acquisitions."

"We have significant experience with acquiring and managing life businesses.  We will work closely with Zurich to ensure that policyholders experience a seamless change of ownership and continue to enjoy the same excellent levels of service."

"I am particularly pleased that the transaction will enable us to enter the fund administration services market.  This is very closely related to the policy administration service we already offer in the Isle of Man and opens up opportunities for us to deliver new services to fund managers in the Isle of Man and other international markets."

Clive Baker, Chief Executive Officer, Zurich International Life said:

"Zurich International Life has not been active in the portfolio bond market for some time. Charles Taylorhas significant experience with acquiring and managing life businesses and we have followed a rigorous process to ensure we have chosen the right company for our customers. This transaction protects our customers, reduces our risk exposure and is aligned with our strategy, ensuring focus and resources can be directed towards sustained key growth areas of the business".

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