ROYAL LONDON, the parent company of Edinburgh-based insurers Scottish Life and Bright Grey, has said there will be no significant job losses following its £1.27 billion acquisition of life insurer Scottish Provident.
The London-based mutual company has also pledged to keep the Scottish Provident brand alive, saying it has no intention of merging it with its existing Bright Grey subsidiary, which specialises in the same sector.
Scottish Providen , which formerly employed 750 people in Edinburgh’s St Andrew Square, was relocated to Glasgow’s St Vincent Street by former owners Abbey National in 2004. They will not be relocated to Edinburgh.
Royal London’s acquisition of Scottish Provident, which is linked to Hugh Osmond’s Pearl Group’s £5 billion acquisition of zombie fund player Resolution, is expected to be completed in mid-February.
Royal London has offered to contribute £1.27 billion towards Pearl’s takeover of Resolution, and in exchange will be handed both the Scottish Provident and Scottish Provident International businesses, as well as a portion of Resolution’s closed book of life business, the administration of which will remain with Capita in Glasgow.
“The purpose of this acquisition is not to reduce costs but to grow the business,” said Alasdair Buchanan, Royal London’s group head of communications.
Together, Scottish Provident and Bright Grey have an estimated 15% share of the UK protection market — which includes critical illness cover and income protection insurance. Buchanan said the mutual insurer intends to use the acquired business as a platform to fight bigger players such as Norwich Union, Legal & General and Friends Provident.
Royal London Asset Management will also gain an additional £2 billion in assets, which will be added to the £35 billion it has under management. Resolution’s shareholders are expected to approve the sale of the group for 720p a share.
This article was published under headline “Provident set to stay Scottish” on page three of The Sunday Times Scotland’s business section on 6 January 2008