Liverpool Victoria Friendly Society has acquired Permanent Insurance, Equitable Life's specialist protection and health insurer, for £150m.
Permanent is the first disposal made by Equitable Life after it stopped taking on new business at the beginning of December after a House of Lords ruling left it with a liability of £1.5bn.
Permanent's core product range includes income protection, critical illness and long-term care. Its premium income at the end of 1999 was £60m and it made net profits of £12.4m.
The long-term care insurance market looks set to expand as the bill on care provision currently going through parliament is likely to provide only basic state provision.
Liverpool Victoria said it had identified the IFA protection market as being at the heart of its growth plans in the UK life sector and believed that Permanent would play an important role in accelerating the strategy.
Liverpool Victoria launched its first IFA initiative in February 2000, focusing on with-profit investment bonds. Spokesman Peter Waller said the company felt it needed to add extra products.
Waller said Liverpool Victoria would be interested in further acquisitions if anything suitable became available. “We are an organisation that has a strong commitment to our membership and if opportunities arise we would consider them,” he said.
Malcolm Berryman, chief executive of Liverpool Victoria said: “This transaction makes great strategic sense for us, given our ambitious growth plans and the positive outlook for the UK protection market.”
Permanent's managing director, Andrew Chapman said: “The acquisition by Liverpool Victoria represents a very positive outcome both for our customers and our staff and is an excellent opportunity for Permanent to develop in the future with a financially strong parent.”
Permanent has 225 staff, mostly based at its head office in Exeter, which Liverpool Victoria intends to retain. No redundancies are currently envisaged.
Liverpool Victoria employs around 2,300 staff, most of them in Bournemouth. The group has more than £5bn of funds under management and in 1999 it made profits of £257.6m.
The deal is expected to be completed in March or April.