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.

Life and Style
tech

Sales of the tablet are set to fall again, say analysts

Environment
A Brazilian wandering spider
natureIt's worth knowing for next time one appears in your bananas
Life and Style
gaming

I Am Bread could actually be a challenging and nuanced title

News
Nigel Farage has backed DJ Mike Read's new Ukip song
i100
PROMOTED VIDEO
Life and Style
tech

Company decides to go for simply scary after criticising other sites for 'creepy and targeted' advertising

News
The Banksy image in Folkestone before it was vandalised
people
Sport
Mario Balotelli pictured in the win over QPR
footballInternet reacts to miss shocker for Liverpool striker
News
news

Footage shot by a passerby shows moment an ill man was carried out of his burning home

Voices
Sol Campbell near his home in Chelsea
voices
News
Kimi the fox cub
newsBurberry under fire from animal rights group - and their star, Kimi
News
ebooksAn unforgettable anthology of contemporary reportage
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

Customer Service Executive / Inbound Customer Service Agent

£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

ASP.NET Web Developer / .NET Developer

£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Project Coordinator - 12 month contract

£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

Day In a Page

Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

'They poured water on, then electrified me...'

If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
James Wharton: The former Guard now fighting discrimination against gay soldiers

The former Guard now fighting discrimination against gay soldiers

Life after the Army has brought new battles for the LGBT activist James Wharton
Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

Panic over Ebola threatens to infect the midterms

Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
Premier League coaches join the RSC to swap the tricks of their trades

Darling, you were fabulous! But offside...

Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

How to dress with authority

Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

New book on Ian Curtis sheds fresh light on the life of the late singer

'Joy Division were making art... Ian was for real' says author Jon Savage
Sean Harris: A rare interview with British acting's secret weapon

Sean Harris: A rare interview with British acting's secret weapon

The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

Tim Minchin interview

For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
Boris Johnson's boozing won't win the puritan vote

Boris's boozing won't win the puritan vote

Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

Tim Wheeler: Alzheimer's, memories and my dad

Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

How We Met: Hugh Bonneville & Peter James

'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

Bill Granger's heavenly crab recipes

Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
Radamel Falcao: How faith and love drive the Colombian to glory

Radamel Falcao: How faith and love drive the Colombian to glory

After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

Terry Venables column

Premier League managers must not be allowed to dictate who plays and who does not play for England
The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

Michael Calvin's Inside Word

Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past