Co-op ‘mulls sale of life assurance arm’
THE CO-OPERATIVE Group has begun a strategic review of its life assurance business.
According to a report in the Sunday Times, the Manchester-based mutual has appointed Deutsche Bank as an advisor to handle a potential sale of its life assurance arm, which provides cover to around 3m customers.
Deutsche Bank has already prepared an information pack which has been sent to a number of major players in the insurance sector.
The Co-operative’s Financial Services arm made a pre-tax profit of £75.9m in the first half of 2010 – up 50% from £50m a year earlier. It has been transformed in recent years following its merger with the Britannia Building Society, whose chief executive Neville Richardson now runs the business.
CFS’s general insurance business saw gross written premiums increase by 18.4%, and its life and savings business increased sales by 5%. It said that profitability of its new business was £8.5m, compared with £4.1m in 2009, and that the value of its new business premiums rose by 25% to £384m.
Moreover, a reduction in the number of financial advisors used and other cost efficiences contributed to a drop in the division’s maintenance expenses by 35% to £23.2m.
