Lloyds to buy Zurich's United Kingdom workplace pensions and savings business

Leslie Hanson
October 12, 2017

The deal brings with it 500,00 customers and is being seen as a major shot in the arm to Lloyds' Scottish Widows pensions and retirement business, Scottish Widows having been acquired by the United Kingdom bank in 1999.

Lloyds Banking Group PLC (LON:LLOY) has agreed to buy Zurich Insurance's United Kingdom workplace pensions and savings business.

According to Lloyds, the transaction enhances Scottish Widows' offering while delivering a modern, flexible workplace savings platform and an enriched customer experience.

Of Scottish Widows existing £124bn of funds under management, £35bn is in the workplace pensions business.

"Today's announcement is a clear signal of Lloyds Banking Group's commitment to the financial planning and retirement segment", Antonio Lorenzo, Director, Insurance & Wealth and Chief Executive, Scottish Widows, commented in the statement.

"Zurich Corporate Savings is highly regarded and has achieved good growth in assets under administration driven through strong relationships with large-scale corporate clients and their intermediaries".

"This new exclusive deal with Lloyds Banking Group broadens our corporate protection distribution footprint". The move comes after the lender, bailed out by the United Kingdom government during the financial crisis, completed its acquisition of Bank of America's MBNA credit card business earlier this year. We are simplifying our organisation and focusing on markets where we have strong assets and can best serve our customers and distributors.

Earlier this year, Zurich merged its United Kingdom life and general insurance businesses into one division, which it said would lead to a reduction of 240 mainly back-office jobs.

Around 200 Zurich staff will move to Lloyds as part of the deal.

Data published in Platforum's February Workplace Savings Guide show that based on third quarter 2016 assets under advice figures, Scottish Widows and Zurich would have a combined £47.7bn AUA compared to Legal & General at £56.9bn and Aviva at £55bn. "To support our other ambitious growth plans, we are also investing in a new multi-million pound retail protection platform and enhancing the range of products on our retail wealth platform".

The Zurich tie-up is expected to partially close early next year, with full completion to follow once regulators give it approval.

Other reports by Iphone Fresh

Discuss This Article