Family, the UK's largest tax-exempt society, said this would be the first time a friendly society had acquired a life insurer.
Templeton Life has made little progress since it was formed more than four years ago from Templeton's acquisition of Time Assurance, another friendly society. Its funds under management have risen from about pounds 200m to pounds 230m. Sales in the 11 months to last September were less than pounds 10m.
Family is paying substantially less than Templeton Life's net asset value of pounds 2.85m.
Dickson Anderson, general manager for Templeton in Europe, said the UK life insurance marketplace had changed dramatically over the past five years, and even big insurers were finding it difficult. Templeton's main strength was in investment management. 'I would not say it was a mistake,' Mr Anderson said. 'We have learned a lot from it.'
John Reeve, chief executive of the Brighton-based Family, said the deal would expand the society's product portfolio since Templeton Life had about pounds 200m of pensions business. 'It will allow us to spread our overheads and allow us to put downward pressure on unit costs,' he added.
Templeton Life will change its name to Family Life. The company, and its 20 employees, will initially remain in Oldham. Templeton will continue to manage the company's unit-linked insurance and pension policies. The deal still needs the approval of Family's 500,000 members at a special meeting in three weeks' time.
Tax-exempt savings policies, with a maximum investment of pounds 200 a year, represent about 90 per cent of Family's business.Reuse content