After nearly 18 months of negotiations, Glasgow based financial service provider Scottish Friendly has completed the acquisition of a substantial block of 127,000 life insurance policies and pension plans from Canada Life.
As reported by The Scotsman, Scottish Friendly will see their assets increase by £2.4bn to more than £5bn thanks to an operation that, in chief executive Jim Galbraith’s words, “forms part of our three-pronged strategy of organic growth, business process outsourcing for partners and mergers and consolidation, delivering the strongest possible growth and customer care for our members”.
The deal is a result of a competitive tender process started by Canada Life to find a UK based mutual that would be able to take on pension plans and insurance policies for their customers. Comprised of roughly 80 per cent pensions and 20 per cent life policies, the deal will be an excellent boost for Scottish Friendly, as it will help create 50 new jobs in the Glasgow area with their membership increasing to almost 700,000 customers in total.
As Galbraith told insider.co.uk, the deal is “a landmark acquisition for Scottish Friendly”, which is the largest provider of investment solutions in Scotland. The company expects this acquisition will help to consolidate them as “a significant player in UK financial services”.
Meanwhile, Richard Priestley, MD & Executive Director, Insurance Division, Canada Life UK, stated that deal is “an excellent move for both organisations, for Scottish Friendly by increasing their scale and for Canada Life to concentrate its resources around its core business strategy”.
Both companies have decided to make the product transfer easy for their customers. “Our priority in this transfer was ensuring customers receive the highest standards of care both during this transition period, and beyond. Scottish Friendly has a great reputation in this area which gives us confidence that customers will be in good hands”, Priestley added.
However, for customers without an extensive financial knowledge Scottish Friendly’s acquisition of their life insurance or pension plans can raise questions. In order to answer some of the most frequently asked questions about what the agreement means for customers, we have gathered some information for our readers.
What does the deal mean for Scottish Friendly?
It will see the company grow and take care of customers who were previously with Canada Life UK. This will result in an increase of Scottish Friendly assets to more than £5bn and it’s estimated that the company will effectively double in size.
What services will Scottish Friendly be taking care of?
Products transferred to Scottish Friendly from Canada Life UK include pension plans, endowments, investment bonds, whole of life policies and protection policies.
What does the deal mean for Canada Life UK members?
The deal will mainly affect Canada Life UK members who had their agreements in place before 2003, who will become members of Scottish Friendly with the same rights as current Scottish Friendly members.
Will the new deal cause any disruption?
Scottish Friendly is hoping for a seamless transition where the transfer of services will not affect users current plans.
I have a policy with Canada Life. Do I have to do something?
Canada Life members being transferred to Scottish Friendly are not expected to have to take any action, however, for some peace of mind visit Scottish Friendly.
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- Interesting related article: “What is a Pension?“