Deal adds 454,000 policies to Chesnara’s UK portfolio
Life insurance consolidator Chesnara has announced that it has entered into an agreement to acquire HSBC Life (UK) from HSBC Bank for £260 million, in a deal that will significantly increase its scale and cash generation capabilities.
Under the agreement, Chesnara will take control of HSBC Life (UK), a provider of life protection and investment bond products, with Eligible Own Funds of £314 million as of December 31, 2024. The transaction is expected to generate more than £800 million in lifetime cash and over £140 million within the first five years after completion.
Chesnara will finance the deal through a mix of £55 million in internal resources, a £65 million drawdown from its expanded £150 million revolving credit facility, and approximately £140 million raised via a fully underwritten rights issue priced at 176p per share.
The acquisition is projected to support a 6% increase in Chesnara’s final FY25 and interim FY26 dividend. The company also expects to benefit from cost and capital synergies, as well as further opportunities in management and new business lines.
“This highly accretive transaction will allow us to build on our strong, 20-year track record of uninterrupted dividend growth,” said Chesnara chief executive Steve Murray. “HSBC Life (UK) is a high-quality business operating in products that we know well and is capable, under our ownership, of generating substantial cash flows for many years.”
Chesnara said the deal will add around £4 billion in assets under administration and approximately 454,000 policies, marking a substantial expansion of its UK footprint. The company also anticipates that a greater free float could boost the liquidity of its shares and improve its prospects for FTSE 250 inclusion.
The acquisition is subject to regulatory approval and is expected to complete in early 2026.
The announcement comes shortly after HSBC Life (UK) expanded its adviser support operations. Last week, the insurer said it had hired three new business development managers and launched a dedicated protection adviser support team to improve adviser experience. The new support team will offer assistance on matters such as underwriting, commissions, application statuses, and system issues.
HSBC Life (UK) has also joined the Protection Distributors Group’s 2025 Claims Charter, reinforcing its commitment to better customer outcomes. The firm reported £93 million in life and critical illness payouts in 2024, with claim acceptance rates of 97.53% for life insurance and 94.44% for critical illness. Average life claim settlements took 19 days, improving to 13 days in Q1 2025, while critical illness claims were processed in an average of 32 days.
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