Zurich-based Swiss Re has agreed to buy the mature savings business of Legal & General Group (L&G) for £650m.

The business to be acquired by Swiss Re, through its ReAssure division, has £33bn in assets.

ReAssure, which is a life and pensions business, will get 1.1 million life insurance policies from L&G as part of the transaction.

Swiss Re’s division will also manage the acquired policies.

Swiss Re said that the transaction is in line with its strategy to acquire closed life books in the UK.

Included in the policies are with-profit, unit-linked and savings products, all of which will be transferred to ReAssure from Legal & General Assurance Society, a unit of L&G.

Swiss Re Life Capital CEO Thierry Léger said: “We are delighted to have been able to acquire another attractive portfolio in the UK closed book market. This is an excellent fit with our strategy to grow ReAssure in order to create value for shareholders.

“Swiss Re remains committed to diversify its portfolio by accessing life and health risk pools via alternative channels, and ReAssure provides an excellent platform for growth."

Post transaction, ReAssure will manage 1.1 million more policies, taking the total number of owned or administered policies to about 4.7 million.

Further, there will be an increase to about £77bn in ReAssure assets under management which includes investments for unit-linked and with-profit business.

For L&G, the transaction allows it to use the proceeds to reinvest for the growth of its core businesses that include investing and annuities, investment management and insurance.

L&G Group CEO Nigel Wilson said: "This was a difficult decision as with-profits savings has been a part of Legal & General’s UK business for over 50 years.

“However we have in Swiss Re a great partner, who will be an excellent steward of the business and its many customers and policyholders.

“Selling Mature Savings is the right decision for us – another important, measured, step in growing our company and updating our products. It will drive further earnings growth by allowing us to focus on our successful market-leading businesses and to accelerate the scaling up of our growth businesses.”

Image: Swiss Re’s Zurich head office in Switzerland. Photo: courtesy of Swiss Re.