Thu, 21 Mar 2013 | DIVISION SALE
The Co-operative has plans to sell its general insurance operations with a possible price tag of around £600 million.
The plans are part of a broader strategic review at the group, and the sale of its life and savings business this week was part of this. It was announced on 19 March that Royal London Mutual Insurance Society has agreed to purchase the Co-operative Insurance Society with its related subsidiaries and Co-operative Asset Management in a £219 million deal.
The Co-op announced its results for the year to 5 January 2013, which showed non-core banding losses “adversely impact” the group profits. While turnover for the group had increased from £12.3 billion in 2011 to £12.44 billion, an operating loss of £535 million was also recorded for 2012.
An overall group statutory loss of £599 million was recorded, down from a profit of £373 million in 2011.
Advisers have not yet been brought in to assist with the insurance business sale, though the group has already received some expressions of interest.
The general insurance arm mainly operates from the North West and has a workforce of 1,200. It has millions of motor and household customers. It is thought Tungsten Corporation may put an offer on the table.
Barry Tootell, the chief executive of The Co-operative Bank, commented, “We have a clear view of what is strategically important to ensure that the remarkable transformation of The Co-operative Group over the last five years is fully embedded and can be built upon.”
In other areas of business the Co-op is fairing well, with a “marked improvement” in its food sales for the second half of the year. Overall, the group has achieved underlying operating profits of £431 million, with £523 million recorded for the year before.
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