Sun Life may sell off GRE business

SUN LIFE and Provincial Holdings, which last month catapulted itself into third place in the UK general insurance league with the pounds 3.4bn takeover of Guardian Royal Exchange, said yesterday that it is considering selling GRE's life business.

The operation contributed pounds 435m of premium income last year and employs 1,200 staff.

Sun Life, which yesterday posted its offer document to GRE shareholders, has also increased its estimate of annual savings likely to flow from the integration of the GRE businesses from pounds 50m to pounds 55m.

Mark Wood, Sun Life chief executive, said yesterday the group would not be integrating GRE's life activities with its existing life and pensions operations, and has instead placed the business in strategic review.

Sun Life - quoted in London but majority owned by AXA, the French insurance giant - pre-sold GRE's US and German businesses ahead of last month's agreed takeover to Liberty Mutual and AXA Colonia respectively.

Mr Wood said that, while a sale was currently not the most likely outcome, all options were being considered. It is hoped to complete the review in five months. He said: "We have had a chance to consider the options. But at the end of the review we will have a clear view as to how we hope to move forward."

The group is also reviewing its options for GRE's Irish business, which is the biggest general insurer in Ireland. Some observers said it was the most attractive part of the entire GRE operation. The Irish business has total annual premium income of pounds 220m.

Mr Wood said the group believed that by improving the underwriting performance in the GRE businesses to the levels achieved by Sun Life, the group would be able to improve returns and meet the demanding hurdle rates set by AXA. He said the GRE deal would boost earnings even if general insurance rates remained flat for the next two years.

"This is a turnaround story," he said. "What we believe the deal enables us to do is to achieve economies of scale and compete at ever decreasing levels of margins."

Sun Life has now completed the integration of the Sun Life and AXA Equity & Law businesses following the 1997 merger. The group said yesterday that 90 per cent of the original objectives had been met and cost savings were now projected to be running at pounds 47m a year - pounds 10m more than planned.

Year's operating profits for the group as a whole were up by 14 per cent to pounds 247.1m, with cost savings and a strong performance on the life and asset management sides making up for weaker general insurance; this suffered a pounds 35m underwriting loss. The previous year has been restated pro-forma as if Equity & Law had been included for the entire year.

Pre-tax, the group reported profits down from pounds 363.3m to pounds 325.6m, a fall of 11 per cent. The total dividend for the year is 13.5p a share, an increase of 15 per cent.

Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
News
people
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
PROMOTED VIDEO
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
Rhys Williams
commonwealth games
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Life and Style
The veteran poverty campaigner Sir Bob Geldof issues a stark challenge to emerging economies at the Melbourne HIV/Aids conference
health
Arts and Entertainment
Benedict Cumberbatch and John Malkovich talk Penguins of Madagascar at Comic-Con
comic-con 2014Cumberbatch fans banned from asking about Sherlock at Comic-Con
Arts and Entertainment
Chris Pratt stars in Guardians of the Galaxy
filmGuardians Of The Galaxy should have taken itself a bit more seriously, writes Geoffrey Macnab
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Graduate Recruitment Resourcers - Banking Technologies

£18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...

Graduate C# Developer (.NET, ASP.NET, HTML, SQL, RDBMS, Windows

Negotiable: Harrington Starr: Graduate C# Developer (.NET, ASP.NET, HTML, SQL,...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform