Chesnara, the UK-listed life and pensions consolidator, has entered into an agreement to acquire 100% of the issued share capital of Scottish Widows Europe, a Luxembourg-based closed life insurance business, from Scottish Widows, a subsidiary of Lloyds Banking Group, for total cash consideration of €110m, the company announced on 17 February 2026.
The deal adds €1.7bn of assets under administration and about 46,000 in-force policies, according to Chesnara. The acquired policyholders are based in Germany, Austria and Italy, providing what Chesnara described as an entry point for further expansion and consolidation across Europe.
Luxembourg foothold
For Chesnara, which focuses on consolidating life and pensions books in the United Kingdom and Europe, the acquisition opens a regulated base in Luxembourg, a major cross-border insurance hub. The company positioned the purchase as a way to broaden its consolidation opportunity set, arguing that Luxembourg’s life insurance market offers scope for additional deals.
Scottish Widows Europe will continue as a standalone operating business led by an experienced local management team after completion, Chesnara said. It added that the company operates a largely outsourced model, with policy administration powered by Lifeware, a third-party technology provider.
Pricing and capital impact
Chesnara said the €110m consideration is fully financed with available cash and represents 0.64x Scottish Widows Europe’s eligible Solvency II own funds of €173m for the financial year ended 31 December 2024. Chesnara also framed the price as 64% of eligible own funds at the same date.
The group’s Solvency II ratio is expected to remain 173% on a pro forma basis as at 31 December 2024, incorporating the acquisition and the issuance of its £150m restricted tier 1 bond in August 2025, Chesnara noted. It added that this would remain above its normal operating range of 140% to 160%, while the pro forma leverage ratio is expected to stay in line with an investment grade rating and below its longer-term target of less than 30%.
Cash generation and funding
Chesnara expects the acquisition to generate about €250m of cash over the lifetime of the policies in the Scottish Widows Europe portfolio, with about €100m of that in the first five years. The company attributed the forecast to capital surplus generation from future profits and its approach to capital management.
The €110m consideration will be funded from internal cash resources, with Chesnara drawing on part of the proceeds of its £150m restricted tier 1 bond issue in August 2025.
The acquisition is expected to complete towards the end of 2026, subject to customary regulatory approvals.
