Aegon sells £7.4bn life insurance and pensions book to Cinven for £275m

DUTCH insurance group Aegon sold its closed life insurance and pensions business Guardian Life to European buyout firm Cinven for £275m yesterday in a widely-trailed move.

Cinven will acquire Guardian’s £7.4bn assets and run off the portfolio of existing policies.

The Guardian sale is the latest disposal of non-core assets by Aegon as recovers from its €3bn (£2.6bn) Dutch state bailout in 2008.

“Consistent with actions over the past three years to dispose of, or run off, certain businesses deemed non-core, Aegon has concluded that managing the closed business of Guardian companies no longer fits with our strategic objectives,” said Jan Nooitgedagt, Aegon’s chief financial officer in a statement.

Guardian manages more than 300,000 UK life insurance policies but has been closed to new business for a decade. It generated £23m in underlying pre-tax earnings in 2010, and had embedded value of £322m and book value of £271m in June.

The sale is believed to be Cinven’s first step into the closed life insurance market, which is dominated by companies such as Swiss Re, Phoenix Life and Resolution. Cinven may follow their lead by buying up and consolidating closed portfolios to run off.

Aegon recently completed the sale of its Transamerica Reinsurance operations to Scor for about $900m. It repaid its bailout in full in June.