Chesnara, a prominent player in the insurance market, has reached an agreement to acquire MetLife UK Limited, a closed-book life insurer owned by MetLife, in a strategic move that marks its fourth acquisition in a span of two years. This decision reinforces Chesnara’s position in the market and enhances its operational scale, as the acquired portfolio includes variable annuities and unit-linked investment policies encompassing approximately 18,000 customers with assets totaling £1.7 billion.
MetLife UK ceased its new business operations in 2017 but has since been managing its existing portfolio, which involves investment policies with optional guarantees designed for customer security. Notably, the acquisition pertains solely to the closed book, as MetLife retains its UK protection business and will continue to serve those clients independently.
From a financial perspective, Chesnara anticipates that the acquisition will yield approximately £90 million in lifetime cash flows, with about half of this expected within five years following the deal’s completion. Additionally, the integration stands to add approximately £45 million to Chesnara’s own funds and contractual service margin, an essential indicator of future profitability under the International Financial Reporting Standards (IFRS 17). The impact of the acquisition on Chesnara’s Solvency II ratio is expected to be neutral, reflecting a stable financial outlook.
The risks associated with guarantee obligations on MetLife UK’s variable annuities will remain reinsured with a reputable European reinsurer rated AA by Standard & Poor’s and Fitch, ensuring continued protection for the acquired policies. Furthermore, the administration of these policies is outsourced to SS&C Technologies, which is already a partner of Chesnara, facilitating a seamless transition.
The acquisition aligns with Chesnara’s strategy of focusing on consolidating legacy insurance portfolios. The firm’s recent growth trajectory includes the acquisition of a portfolio of onshore bonds from Canada Life UK in December 2024 and the significant £260 million purchase of HSBC Life UK, which has since been rebranded as Chesnara Life UK.
Following these acquisitions, Chesnara has significantly improved its operational scale, increasing its assets under administration by 38% to £21 billion by mid-2026, and now administers around 1.3 million policies across the UK, the Netherlands, and Sweden. This shift reflects a broader trend within the industry, as many insurers divest closed books to specialized firms adept at managing legacy policies. As such, clients with MetLife UK variable annuities can expect continuity, as their guarantees and administrative services will remain stable. This acquisition positions Chesnara well for future growth in a competitive market environment.
The transaction is anticipated to finalize in the first half of 2027, pending regulatory approval.