Sun Life Offloaded As Part Of £375m Axa Deal

Insurance firm Sun Life is to be sold by French owner Axa (Paris: FR0000120628 - news) as part of a £375m deal with the UK's Phoenix Group.

The Bristol-based business, which has more than 850,000 life insurance policies for over-50s in force, is being snapped by Phoenix along with UK pensions and investment operator Embassy.

Phoenix - which is Britain's largest owner of life assurance funds closed to new customers - said the deal, expected to complete in 2016, would result in cost savings of £10m per year.

Chief executive Clive Bannister said: "We will invest heavily to ensure a smooth transition of the two businesses from Axa to Phoenix and we are committed to delivering the highest level of service."

He said the deal was another important step forward in the company's growth strategy and that it would look for further opportunities with the UK life insurance industry continuing to consolidate.

The company said it recognised the importance of the "skills and experience of the existing management and employees" of Embassy and Sun Life. It (Other OTC: ITGL - news) added that it would "identify opportunities for streamlining operations" which could include outsourcing certain functions.

Sun Life, which employs 270 people, will remain largely unchanged. It was "too early to say" what the impact would be on staff at Basingstoke-based Embassy.

Overall, Phoenix said the deal would see it add £12.3bn of assets under management and more than 910,000 policies.

Axa's sale of the businesses is part of its plan to switch focus away from the UK and Europe to target higher growth markets. In April, Axa sold advisory business Elevate (Other OTC: ELEV - news) to Standard Life (LSE: SL.L - news) . Together, the deals raised £632m.

New European capital rules for insurers that came into force in January have increased the cost of running life insurance businesses (Other OTC: UBGXF - news) .