Lloyds Banking Group (LBG) is to acquire Zurich’s UK workplace pensions and savings business with assets under administration of more than £15 billion and around 500,000 customers.

Scottish Widows already manages more than £124 billion of funds of which £35 billion is workplace pensions business.

This transaction will see Zurich receive exclusive distribution rights for group life protection to certain corporate clients of LBG’s Commercial Banking services.

Antonio Lorenzo, LBG director, insurance & wealth and chief executive, Scottish Widows, said: “[This] announcement is a clear signal of Lloyds Banking Group’s commitment to the financial planning and retirement segment. The acquisition of Zurich Corporate Savings complements Scottish Widows’ growth to date and provides us with an ideal opportunity to accelerate our goal to become a market leader in this important sector for advisers and customers.

“Zurich Corporate Savings is highly regarded and has achieved good growth in assets under administration driven through strong relationships with large-scale corporate clients and their intermediaries. The greater proposition choice created through this acquisition will help us meet adviser and customer demands and ensure we continue to evolve our service proposition so that we are easy to do business with.”

Tulsi Naidu, CEO of Zurich UK, said: “We see today’s announcement as a very positive step forward for our business. We are simplifying our organisation and focusing on markets where we have strong assets and can best serve our customers and distributors. Our UK life and savings strategy is simple – to establish market leading positions in retail wealth, and retail and corporate protection, while growing our new corporate longevity and de-risking business.

“This new exclusive deal with Lloyds Banking Group broadens our corporate protection distribution footprint. To support our other ambitious growth plans, we are also investing in a new multi-million pound retail protection platform and enhancing the range of products on our retail wealth platform.”

As part of the transaction c.200 Zurich employees – including key management, relationship managers, technical experts and operations staff, located primarily in Cheltenham – are expected to transfer to LBG under a TUPE arrangement.

The acquisition is expected to partially close in the first quarter of 2018, with subsequent completion and transfer of assets following the required regulatory and legal approvals.