Allied Dunbar Assurance, a subsidiary of Zurich Financial Services is to take over the new business capability of Abbey Life Assurance, part of the Lloyds TSB Group.
As a result of the £100m deal, Abbey Life’s distribution force of 1,350 self employed advisers and 165 sales managers are to be offered the chance to take up an Allied Dunbar franchise.
The combined network of advisers and managers is set to be the largest in the UK and integration of the two businesses is expected to be complete by the end of March.
Once the deal is finalised, Abbey Life will be closed to new business, other than for increments to existing policies, fees for which will go to Allied Dunbar.
Abbey Life policyholders will receive a letter to explain there will be no change to the terms and conditions of their policies and most will be able to retain their existing adviser.
Abbey Life advisers are being briefed about the changes in a series of meetings around the country. Those who choose to take up an Allied Dunbar franchise will be able to resume servicing their clients after completion of a training programme. All new products sold thereafter will be from the Allied Dunbar marketing group, incorporating Threadneedle.
Allied Dunbar is to pay an initial consideration of £80m for Abbey Life’s new business capability, with a further sum of up to £20m payable on the second anniversary of completion and subject to agreed levels of new business being generated. In 1999, Abbey Life generated over £90m of new business.
Sandy Leitch, chief executive of Zurich Financial Services (UKISA) said: “Professional, face-to-face advice to consumers is the core proposition of the Allied Dunbar Franchise Network. This acquisition gives us the unique opportunity to build on our success so far and create the largest and most productive network in the UK.”