Manchester-based Co-op Group said on Friday it agreed to sell its insurance underwriting business, CIS General Insurance Limited, to Markerstudy for about £185 million.
Co-op Group said it will also enter a 13 year distribution agreement with Markerstudy to distribute motor and home insurance products.
The transaction is expected to complete in Q2 2019, subject to PRA and FCA approval.
Co-op deputy CEO Pippa Wicks said: “From the outset we’ve been very clear that we intend to enhance our insurance offer for Co-op members and this agreement provides the means for us to do this in an effective way.
“Markerstudy have shown a clear willingness to partner with us, and to develop a compelling range of products which will increase our insurance footprint and extend our Co-op difference.
“The Co-op has a long and distinguished history in providing insurance for its members and I’m delighted that this will continue through our partnership with Markerstudy.
“We have always been mindful of our insurance colleagues and a key factor in our selection was the commitment given by Markerstudy to maintain and then look to expand the operation.”
Markerstudy Group CEO Kevin Spencer said: “We are delighted to have been chosen by the Co-op.
“Our roots are firmly in the UK insurance industry, where we provide cover to more than 1.5 million customers, and offer value and choice, coupled with award-winning service.
“Our purchase of the Co-op’s insurance underwriting business and the arrangement to provide insurance products to its members is testimony to our robust business model and investment in our people and technology.
“This is an exciting partnership opportunity for us, where we hope to combine our experience and expertise into a shared vision of success, enabling us to assume a significant role in the longevity of this cherished household name.”
Fenchurch Advisory Partners acted as financial adviser to Co-op in this transaction, with Allen & Overy acting as principal legal advisers to Co-op. HFW acted as legal advisers for Markerstudy.