Chesnara agrees €110m purchase of Lloyds’ Luxembourg run-off insurer Proactive uses images sourced from Shutterstock
UK life and pensions consolidator targets about €250m of cash generation from Scottish Widows Europe as it expands into a new European market.
Chesnara PLC (LSE:CSN), the UK-based life and pensions consolidator, has agreed to buy Scottish Widows Europe, a Luxembourg-based closed life insurance business owned by Lloyds Banking Group, for €110 million in cash.
The deal comes just two weeks after Chesnara closed its £260 million acquisition of HSBC’s UK life business.
Chesnara said the purchase would add €1.7 billion of assets under administration and about 46,000 in-force policies, with policyholders based in Germany, Austria and Italy.
The company said it expected the Scottish Widows Europe portfolio to generate about €250 million of cash over the lifetime of its policies, with about €100 million expected in the first five years.
It told investors the price was an “attractive multiple” of 0.64 times Scottish Widows Europe’s eligible Solvency II own funds of €173 million as at 31 December 2024.
The acquisition marks Chesnara’s entry into Luxembourg, which it described as “an additional attractive market” that could provide a platform for further consolidation and scale across Europe.
Steve Murray, Chesnara’s chief executive, said: “We are delighted to announce Chesnara’s second significant acquisition in the past twelve months.”
He added: “Scottish Widows Europe is another material and value-accretive transaction with a product set that we know well.”
Murray told shareholders the deal “marks our entry into Luxembourg, providing a new platform for in-market and wider European consolidation and expansion”, and added:
“We are pleased that another major financial institution, Lloyds Banking Group, has chosen us to look after their policyholders.”
Chesnara said it would fund the acquisition from internal cash resources, including using some of the proceeds of its £150 million restricted tier one bond issue in August 2025.
The group said its pro-forma Solvency II ratio would remain “robust” at 173%, above its normal operating range of 140% to 160%.
It said completion was expected around the end of 2026, subject to regulatory approvals, and that Scottish Widows Europe would continue to be led by its local management team after the transaction.
The company added that the business has a largely outsourced operating model and that its policy administration is powered by Lifeware, a third-party technology provider.