Expanding European life and pensions consolidator Chesnara has acquired Canada Life’s onshore bond arm.

The deal will see Chesnara acquire a closed portfolio of unit linked bonds and legacy pension business with approximately 17,000 policies and total assets under management of £1.5bn.

The policies are expected to transfer to Chesnara's UK subsidiary, Countrywide Assured, at the end of 2025, subject to court and regulatory approval.

The deal follows a previous acquisition of the individual onshore protection business of Canada Life in 2023.

Chesnara will pay £2m as part of the reinsurance agreement, funded from internal resources. Chesnara said the transaction should provide an uplift to the group of at least £8m and contribute £8m of cash generation over a five year period.

Steve Murray, Chesnara group chief executive, said: "We are pleased to continue our relationship with Canada Life through the agreement of our second recent transaction, following the acquisition of 47,000 protection policies that we announced last year."

He said the deal was the sixth in the past three years with the UK business now administering over 300,000 policies. The group is continuing to seek M&A opportunities.

Canada Life closed its onshore bond proposition to new business in January.

Sean Christian, managing director for wealth at Canada Life UK, said: “We are delighted to partner with Chesnara plc. on the sale of Canada Life’s onshore bond business. They have strong existing expertise in the onshore bond market, and we are confident they have high standards of customer service and a commitment to delivering good customer outcomes that will support the future needs of our customers and their advisers.

“This represents an important milestone in Canada Life’s transformation journey and will enable us to strengthen our focus on our core markets. The international bond market continues to be a strategic focus for the organisation, and our recent A (Superior) rating by AKG demonstrates our commitment and growing capability in this area.”