Churchill Insurance has signed an £80m white-labelling agreement with Australian giant AMP, which will make Churchill the sole provider for AMP's UK subsidiary Pearl Assurance.
Churchill will take over the administration and underwriting of Pearl's existing general insurance policies (around 400,000 home, 70,000 car and 35,000 commercial) from August 1.
Churchill will start underwriting all new business and manufacture general insurance products for Pearl.
It will also assume responsibility for the liabilities held in Pearl's existing portfolio, but it has not “bought” Pearl's business, as stated in the Financial Times earlier this week.
The agreement relates to premium volumes over a five-year term, and is based on a profit-sharing agreement.
Pearl's 400 employees are based in Peterborough. Churchill has promised to transfer 260 of them to its existing operations in Peterborough, which it plans to expand to make it Churchill's fourth major operational site in the UK. The remainder, mostly call center and direct sales staff, will continue to work for Pearl.
Churchill chairman and chief executive Martin Long said he was delighted to be working with AMP on an “enormously beneficial” deal.
“We'll be welcoming many of Pearl's people into our company and building on our existing presence,” he said.
AMP UK Financial Services managing director Tom Fraser said: “The general insurance industry internationally and in the UK has consolidated rapidly over the past 18 months.
“This presents a significant challenge for general insurance manufacturers to improve efficiencies, invest in technology to remain competitive and maintain margins.”