Co-op looks to sell life insurance business
THE Co-operative Group is considering a surprise sale of its life insurance business as it restructures its financial services operations following last year’s merger with Britannia.
The mutual, whose interests range from supermarkets to funeral services, has sent an information pack to a number of potential buyers to gauge interest.
They include specialist buyout firms Resolution and Phoenix, as well as the likes of Legal & General, Aviva and Royal London. Investment bank Deutsche Bank is to review options.
The Co-op’s life insurance arm controls £18billion of assets and has three million customers. It is believed the company is under no pressure to sell and has no need for capital.
Instead, the decision to consider a sale was sparked by the merger with Britannia. Co-op sells life insurance through a direct sales force but the tie-up with Britannia enlarged its branch network, providing an alternative way of distributing insurance products.
Sources said if a sale did not materialise, then the Co-op would consider alternatives, such as running a hybrid between the two methods of selling insurance. Profits at Co-op Financial Services jumped 50 per cent to £75million in the first half of the year.
Co-op group has recently merged its travel agency and foreign exchange business with Thomas Cook.