Quilter plc has sold its subsidiary, Quilter Life Assurance, to ReAssure for £425 million. File Photo: IOL

DURBAN – Quilter plc has sold its subsidiary, Quilter Life Assurance, to ReAssure for £425 million (R7.62 billion), in a move the group described as solidifying its position as an advice-led, modern wealth manager.

The disposal of the heritage life and pensions division follows after the group announced its strategic review at the beginning of last month. 

Quilter plc was spun off from Old Mutual plc last year after a managed separation and listed separately on the JSE and the London Stock Exchange. 

Quilter chief executive Paul Feeney said: “ReAssure is a highly regarded manager of closed book assets and has the experience to deliver continued high quality investment and administration services to clients of Quilter Life Assurance. 

“The Quilter board is currently minded to return a meaningful proportion of the net surplus proceeds arising from the transaction to shareholders and will consult with them on the most appropriate means of undertaking this,” Feeney said. 

ReAssure is the UK’s sixth biggest life insurer. Last week its parent company, SwissRe, put on ice a proposed £3bn flotation of the UK unit due to weak demand.

The disposal of life assurance came after Quilter released its half-year results to end June by reporting a 5 percent increase in adjusted profit before tax to £115m, up from £110m compared to last year, with assets under management increasing by 8 percent to £118.4bn, up from £109.3bn compared to December last year. 

The group reported adjusted diluted earnings per share of 5.5 pence a share and declared an interim dividend of 1.7p a share.

Commenting on the results, Feeney said Quilter produced a solid set of results for the first half of 2019 as evidenced by growth in adjusted profit before tax with revenues growing modestly faster than costs and a stable operating margin. 

“We are focused on making Quilter a simpler, more efficient wealth management business and the announcement today of the sale of Quilter Life Assurance is a further significant step forward in this regard. “I am delighted that we completed the acquisition of Lighthouse plc in June 2019, consolidating our place as the second largest retail advisory business in the UK,” he said. Quilter acquired Lighthouse Group for £46.2m.  

“We are on a mission to make advice more valued and accessible and want Quilter to be recognised as the best place to go for trusted financial advice in the UK,” Feeney said.

However, the group experienced higher outflows in Quilter Cheviot, following the resignation of some investment managers during 2018, and this put pressure on net flows.

Samantha Steyn, a chief investment officer at Cannon Asset Managers, said Quilters’ results were largely in line with expectations.

“Of slight concern were the outflows in Quilter Cheviot as a result of the departure of investment advisers in the third quarter of 2018. 

“Altogether, the ex-staff members were responsible for an estimated £3bn in assets under management, suggesting that current levels of redemptions could remain elevated for some time. All-in-all, this is a reasonable set of results,” Steyn said.

Quilter shares closed 1.56 percent lower at R24.69 on the JSE on Monday.

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