Exclusive: MetLife To Sell UK Annuities Arm

By Mark Kleinman, City Editor

The US financial services giant MetLife is preparing a sale of its UK bulk annuities business in a deal that would generate hundreds of millions of pounds and pave the way for a further shake-up of the market.

I understand that MetLife, whose headquarters above Grand Central Station is one of New York City's most recognisable landmarks, has appointed investment bankers from Citi to run an auction of its UK Assurance division.

Insiders said today that a sale process had been launched in recent weeks and that a large number of prospective buyers were being sounded out about their interest in the business.

MetLife is understood to have identified the operation as a disposal candidate having spent the last five years building it into a major player in the UK market, which offers bulk annuity and pension risk management solutions for pension schemes.

In December, the financial services company warned that profits this year were likely to be lower-than-expected because of the protracted period of historically-low interest rates in the US.

MetLife has a market value of just over $40bn (£26.1bn), making it the largest life insurance group in the US by that measurement.

It was unclear today how much MetLife was seeking to sell the UK Assurance business for, although people close to the situation said it would be "significantly below" a £1bn figure suggested by some analysts.

MetLife is a leading life insurance group in North America

The division employs 55 people in London, according to the company.

People close to MetLife said that the auction would not involve the sale of MetLife's other UK operations, which include wealth management, employee benefits and the provision of life, accident, sickness and other general insurance products. The insurance products are distributed through major banks in the UK and elsewhere in Europe.

Last year, MetLife sold its banking deposits arm to General Electric, allowing it to shed its regulatory status as a bank holding company, which followed a decision by the Federal Reserve to prevent it returning capital to shareholders.

The company incurred a loss running to tens of millions of pounds from Superstorm Sandy, which caused enormous damage to parts of the US last October. MetLife still expects to make profits of around $5.5bn in 2013, the company told investors in December.

A spokesman for MetLife's UK business said:

"MetLife continually evaluates its businesses to ensure that we are best positioned to achieve our objectives, deliver superior customer service, support long-term business growth and operate effectively and efficiently. We do not comment on market rumours or speculation."

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