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LV= Announces Option Agreement To Aquire New Business Operations of the Former GE Life from Swiss Re

LV= (formerly known as Liverpool Victoria) has announced today that it has entered into an option agreement to acquire from Swiss Re the new business operations of Tomorrow (formerly the GE Life business). The option becomes exercisable in late December 2007, subject to regulatory approval.

The UK’s largest friendly society, LV= has also entered into a distribution agreement under which Tomorrow’s range of specialist enhanced annuities, equity release lifetime mortgages, and pension products including SIPPs, will be distributed under joint LV= and Tomorrow branding from 1 July 2007.

Following a comprehensive strategic review, LV= identified ‘flexible retirement’ products as an attractive market segment for growth. The Tomorrow business is a good fit with the friendly society’s strategy and complements its existing strength in protection and with-profits products. Tomorrow is one of the UK’s leading providers of flexible retirement solutions, selling £785m of new single premium business in 2006.

The key features of the proposed transaction, all of which are conditional upon the exercise of the option, are:

  • LV= has obtained an option to acquire Tomorrow’s new business capability, exercisable in late December 2007.
  • Under a distribution agreement, from 1 July 2007 all products which are currently actively marketed by Tomorrow would be co-branded with LV=.
  • From 1 January 2008 LV= would integrate Tomorrow’s new business operation and offer the former Tomorrow products under the LV= brand.
  • LV= would retain Tomorrow’s new business operations in Hitchin and its regional sales offices. Hitchin would be developed as the core centre of expertise for the LV= flexible retirement offering.
  • LV= would retain the capabilities, experience and distribution relationships of the Tomorrow new business management, sales force and employees, who it believes will be crucial to the future success of the business.

Commenting on the acquisition, Mike Rogers, Group Chief Executive of LV= said: “The proposed acquisition of the new business capability of Tomorrow will give us a strong market presence in three flexible retirement product sectors, with an established and well-regarded IFA distribution network. This proposed acquisition is in line with our strategic vision to expand our proposition into the ‘flexible retirement’ market, it transforms the growth prospects for our life business, and should create substantial value for our members.”

Jonathan Yates, Managing Director of Swiss Re’s UK Admin Re® operation, who was responsible for overseeing Swiss Re’s purchase of Tomorrow from the GE group, added: “We are delighted to be entering into this option agreement. LV= will invest in the people and products required to grow these lines of business. This agreement honours the commitment we made to the market, employees and customers to maintain this business as a going concern.”

Swiss Re completed the acquisition of the Tomorrow business on 14 December 2006. Tomorrow is recognised as a leading UK provider of specialist flexible retirement products, which are distributed entirely through the independent financial adviser sector.

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    Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237. County Gates, Bournemouth, BH1 2NF, UK