EMBARGOED UNTIL 7AM, 15 DECEMBER 2004
Britannic Group acquires the Life Operations of Allianz Cornhill Insurance
Britannic Group plc (“Britannic”) today announces that it has agreed to acquire Allianz
Cornhill Insurance plc’s life operations (the “Life Operations”) for an estimated cash
consideration of £110 million(i), to be funded from Britannic’s Shareholders Retained
Allianz Cornhill’s Life Operations are closed to new business and comprise
approximately 506,000 policies, predominantly life non-profit and unit-linked business,
with total assets of approximately £735 million(ii), as at 31 December 2003. Britannic
expects that the embedded value of the Life Operations as at 31 December 2004 will
amount to approximately £152 million(iii).
As Allianz Cornhill Insurance plc is a composite insurer, the transaction is being
effected through a series of contracts(iv) and is expected to complete by 31 December
2004. During 2005 an application will be made to the court to effect the legal transfer of
the policies to Britannic Assurance plc pursuant to the provisions of Part VII of the
Financial Services and Markets Act 2000.
Britannic intends to migrate the administration of the Life Operations during 2005 from
Allianz Cornhill Insurance plc’s current location in Guildford to Britannic’s main
operations centre at Wythall. The Life Operations’ assets will be managed by Britannic
Asset Management from shortly after completion.
Britannic is confident of achieving at least its stated return criteria of 12% post tax on
risk based capital for this transaction. It should also enhance dividend paying capacity
in the short and medium term.
Britannic also announces that Peter Thomas will be joining the group as Chief
Executive of Britannic Management Services (the group service company). Peter has
over 17 years’ experience in the UK life and pensions industry, principally in customer
services and administration. He has for the last three years been