Utmost said the agreement fits with its strategy to grow the Utmost International business organically and through acquisition. The deal adds £22 billion of assets under administration and 90,000 policies to its business.

Specialist UK life assurance group Utmost Group, which focuses on serving high net worth and ultra-HNW clients, announced today that it has agreed to buy Quilter International in a deal involving £483 million ($664.9 million) in cash. The payment is based on the understanding that the deal is completed at the end of 2021.

The transaction is subject to regulatory approval, Utmost said in a statement.

Quilter International will become a part of Utmost International, the international life assurance group.

The deal adds £22 billion of assets under administration and 90,000 policies to Utmost International. On a combined basis, Utmost International will have £52 billion of assets under administration, 220,000 policies and would have written over £330 million annual premium equivalent (APE) of new business in 2020.

Utmost said the agreement fits with its strategy to grow the Utmost International business organically and through acquisition.

Explaining the rationale for the deal, Utmost said the firms have a complementary business footprint and distribution network – Quilter International has a presence across the UK, Europe, the Middle East, Asia and Latin America, with branches in Singapore and Hong Kong, and a regulated distribution office in the Dubai International Financial Centre (DIFC). This will add to Utmost International’s “existing position in these attractive markets, where Utmost International sees strong, continuing demand for wealth solutions for HNW and UHNW clients,” it said.

Merging
Quilter International will be merged with Utmost International’s operations in the Isle of Man, the DIFC, Singapore and Hong Kong. There will be a single suite of products under the Utmost International brand soon after the transaction is completed.

The Utmost group’s estimated Gross Solvency II Economic Value (SII EV) – a measure of strength in the life assurance space - will increase from £1.7 billion to over £2.3 bullion on a pro-forma basis with an estimated Solvency Coverage Ratio of 183 per cent post-completion.

The consideration of £483 million represents 84 per cent of Quilter International’s own funds of £575 million, as at 31 December 2020. 

Utmost will partly pay for the transaction by raising £275 million in added debt funding. This debt will raise its leverage ratio to 22 per cent of the enlarged Group’s Gross SII EV, which is “well within” its target range of 20-30 per cent. 

Utmost Group said it expects to issue its full-year 2020 results on 28 May this year.