One of the oldest names in British life insurance has been put up for sale with a potential price tag of £200 million.
MGM Advantage, once known as the Marine and General Mutual Life Assurance Society, is a mutual insurer that dates back to 1852.
Investment bank Evercore has been appointed to seek buyers, with management including chief executive Chris Evans said to be hoping a private-equity firm will be willing to inject cash into the business to bolster its financial strength.
MGM has assets of £1.9 million, which it looks after on behalf of 17,000 members.
Bankers suggest that if a buyer is found, this is unlikely to be a deal that sees a windfall payout to members. In the past, members of mutual insurers have enjoyed a boost to their policies once the business is sold.
Evans declined to comment on the appointment of Evercore but confirmed a “review” process is under way.
He says MGM’s annuities business has taken off sharply in the past two years and believes further growth is on the cards.
This performance, he said, has attracted the interest of potential buyers from within insurance and from financial buyers.
“We are growing pretty fast and we want to be able to continue that growth,” he said. “But we have not come to a conclusion. The board is considering a whole range of different options.”
One banker said: “They’ve been knocking on doors. I’m not sure they’ve had much luck just yet though.”
One idea is that most of MGM’s back book — with-profits pension funds typically — is hived off into a separate firm leaving the company to focus solely on annuities.
It believes the market for so-called “enhanced annuities”, which pay out higher pensions to people with lower than average life expectancy due to medical conditions is poised to expand.
The society has its origins in marine insurance. It was set up to offer life assurance to seamen who didn’t drink alcohol. Back in 1840, water was considered dangerous by insurance companies.
MGM has 250 staff at offices in Worthing, West Sussex.
It celebrated its 160th birthday last week.
