Legal & General (L&G) is to sell its general insurance business to Germany’s Allianz for £242m, it has been announced.
The deal, which is subject to regulatory approval, is expected to complete later this year, the UK company said.
It will see two million customers with household insurance policies transfer to Allianz.
L&G said it would use the cash raised to reinvest in its “attractive and growing core businesses”.
Company chief Nigel Wilson said: “Selling the general insurance (GI) business is the right decision for our customers and shareholders. And I would like to take this opportunity to thank our GI colleagues for their contribution to Legal & General.
“We continue to focus on delivering against our strategy, allocating shareholders’ capital rigorously.
“We are market leaders in 10 UK markets and have a growing presence in the USA and an emerging presence in Asia.
“Deploying capital in these businesses will deliver better outcomes for all our stakeholders. Our GI customers will benefit from the strength and capability of Allianz in the household insurance sector.”
Jon Dye, chief executive of Allianz UK, said the deal was “a good outcome for all the parties involved” and was “a strong result”.
“The Allianz Group has worldwide insurance experience, is robustly capitalised and has a strong reputation for customer service and these strengths will be applied to grow the business,” he added.
Allianz is also buying out the remaining 51% stake it does not own in LV General Insurance Group.
After the transactions go through, the firm says it will be the second largest general insurer in the UK with 12 million UK general insurance customers.