Legal & General offloads old savings books to Swiss Re for £650m

Insurer Legal & General offloaded one of Britain’s biggest with-profits funds to reinsurer Swiss Re on Wednesday as part of an exit from old-fashioned saving products.

The £21.4 billion fund, which has a million customers, forms part of a £33 billion unit called Mature Savings set to be transferred to Swiss Re’s ReAssure division next year. L&G will make £650 million from the sale.

With-profits have been a part of the umbrella-logoed company for more than 50 years, chief executive Nigel Wilson said.

“This was a difficult decision. However, we have in Swiss Re a great partner, who will be an excellent steward of the business.”

The sale is part of a move by L&G to focus on state-of-the-art products over traditional savings products.

With-profits funds, which pool investments to absorb market shocks, were popular in the Eighties but fell out of favour because of transparency fears and scandals.

Prudential still runs the UK’s biggest with-profit fund with £76.3 billion.