Lloyds Banking Group to Sell its 70% Stake in Online Insurer esure

February 12, 2010

The UK’s Lloyds Banking Group is selling its 70 per cent stake in online insurer esure, to a management buyout vehicle to be called esure Group Holdings Ltd. The esure Group is led by the company’s chairman Peter Wood. It will pay cash, which is “slightly in excess of book value in the Lloyds Banking Group accounts,” said the announcement.

As of December 31 the esure stake was valued at £185 million ($288.6 million). At that date Lloyd’s said esure had “gross assets of £975.5 million [$1.522 billion] (including assets backing insurance liabilities). The impact on the Group’s accounts is not expected to be material.”

The bulletin noted that “esure, which includes the Sheilas’ Wheels brand [a car insurer specializing in coverage for women], was founded in 2000 as a joint venture by Peter Wood and the then Halifax plc. esure now offers home, motor [car], travel and pet insurance, using the internet as a primary sales channel.”

The bulletin also noted that “esure staff will continue to be employed by esure Services Ltd.”

The Lloyds Banking Group is the largest provider of household insurance in the UK. It operates primarily through two main brands; Lloyds TSB General Insurance and Halifax General Insurance. These operations provide household, motor, travel, pet, business, healthcare and creditor protection insurance products.

Archie Kane, Group Executive Director Insurance, Lloyds Banking Group explained that the sale of esure would enable the Group to “focus our efforts on our core general insurance brands of Halifax and Lloyds TSB. Our priority is to deliver strong insurance products and excellent customer service across the general insurance business, thereby reinforcing our reputation as a market-leading insurance provider.”

Source: Lloyds Banking Group – www.lloydsbankinggroup.com

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