Of Special Interest
19th July 2011
UK Co-op restructures insurance - may sell life arm
Cooperative Financial Services has announced major changes to its insurance operations.
It has entered into exclusive talks with Royal London to sell its life insurance subsidiary including the £15bn of assets in its Long Term Business Fund (LTBF) and The Co-operative Asset Management (TCAM) which manages the fund. It is not intending releasing any further details until the negotiations are completed.
It plans "to enhance and extend its historical partnership with AXA for the provision of in-branch financial advice that exists across the 248 branches of Britannia to its 90 Co-operative Bank branches."
It is to close its field-based advisory team. This group visited people in their homes and also worked from certain branches. The closure will result in 670 job losses and 82 positions transferring to AXA.
Neville Richardson, Chief Executive at Co-operative Financial Services, said:
". . . We understand that such news may be difficult for impacted colleagues and we have not reached this outcome lightly. However, we were faced with rising regulatory costs in a business which was increasingly becoming sub-scale. This move supports our strategy to focus our specific attention on our banking and general insurance areas, where we have a growing and strongly differentiated competitive position.
"With regards to our negotiations with Royal London, our exclusive talks remain ongoing but I genuinely believe that a mutual solution for our life fund would be in the best interests of policyholders and colleagues alike."