Allied Dunbar, the life insurance unit of Allied Zurich Plc, a part of the Anglo-Swiss group, Zurich Financial Services, announced today that it had agreed to purchase Abbey Life from its current owner Lloyd’s TSB, the U.K.’s largest bank.
Allied agreed to pay an immediate sum of £80 million ($130 million) and an additional amount up to £20 million ($32.4 million) in two years according to a formula to be determined by the amount of business generated.
Zurich will integrate Abbey Life into Allied Dunbar, Eagle Star and Threadneedle Investments, its other U.K. holdings. Zurich CEO Sandy Leith was quoted as saying, “This acquisition gives us a unique opportunity to build on our success so far and create the largest and most productive distribution network in the U.K.” Zurich’s life and investment premiums rose 24 percent in 1999 to £2.6 billion ($4.2 billion).
Zurich management may be pleased with the acquisition, but the estimated 350 independent life insurance salesmen currently representing Abbey Life definitely aren’t. Zurich does not intend to renew any sales contracts, and will operate Abbey’s business through its current network.
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