Chesnara (LON:CSN) has agreed to acquire MetLife UK Limited from MetLife Group in a deal the company expects to add approximately £45 million to its Solvency II Own Funds and £90 million in lifetime cash flows.
The proposed acquisition, Chesnara’s fourth deal in two years and its 17th since inception, is expected to close by the end of the first half of 2027, subject to regulatory approvals. Group CEO Steve Murray said the recent transactions are expected to help bring group Own Funds above £1 billion.
MetLife UK has about 18,000 customers and 1.7 billion in assets under administration. Chesnara said the consideration is not expected to be material and that the deal will require no material financing or capital contribution from the group.
Expected financial impact
The estimated £45 million increase in Own Funds represents about 5% of the group’s total Own Funds and close to 10% of its unrestricted Tier 1 capital, Murray said. Chesnara expects a broadly similar increase in its IFRS contractual service margin. Group CFO Tom Howard said both balance-sheet impacts are post-tax.
About half of the expected £90 million in lifetime cash flows is projected to emerge within five years of completion. Howard said the estimate includes an assumption about long-term costs after the policies are migrated but does not include potential future capital management actions, which could provide further upside.
Chesnara expects the transaction to have a broadly neutral impact on its Solvency II ratio. Howard said the company had considered scenarios that could affect the final economic transfer at closing and did not expect a material financing requirement.
Policy guarantees and migration
The acquired contracts were originally marketed as variable annuities and include guaranteed minimum accumulation and income benefits. Howard said the guarantee features are fully reinsured with an external reinsurer, allowing the products to behave economically like unit-linked policies already in Chesnara’s U.K. portfolio.
Murray said the existing agreement with an AA-rated European reinsurer will remain in place after completion. Howard added that the acquired business is expected to diversify well with the existing portfolio, leaving the group’s Solvency II sensitivities to risks such as market movements largely unaffected.
The policies are already administered by SS&C, a strategic partner for Chesnara. The company plans to move them from an older SS&C platform to its newer SS&C-supported operating model. Murray said that arrangement was central to creating value in the deal and would give Chesnara flexibility to consider further U.K. acquisitions in the near term.
Acquisition pipeline
Howard said Chesnara retains enough financial capacity to complete a transaction of a similar size to its Scottish Widows Europe deal. Murray said the company continues to see opportunities across the U.K. and Europe, though he cautioned that the timing of transactions is difficult to predict.
Murray also said Chesnara remains on track to migrate Chesnara Life data from HSBC to its own operating model by year-end and continues to expect change of control for Scottish Widows Europe around the end of 2026.
About Chesnara (LON:CSN)
Chesnara (CSN.L) is a European life and pensions consolidator listed on the London Stock Exchange. It administers approximately one million policies and operates as Countrywide Assured in the UK, as The Waard Group and Scildon in the Netherlands, and as Movestic in Sweden.
Following a three-pillar strategy, Chesnara’s primary responsibility is the efficient administration of its customers’ life and savings policies, ensuring good customer outcomes and providing a secure and compliant environment to protect policyholder interests.
