Canada Life Financial Corp. today announced that the company’s U.K. division has reached an agreement with Royal & SunAlliance Insurance Group plc, to purchase their group life and long term disability insurance business.

The acquisition establishes Canada Life as the market leader in the United Kingdom’s group life business, the country’s second largest group income protection insurance provider and first among all U.K. group insurance suppliers. Canada Life’s estimated share of the U.K. group life and group income protection markets will now rise to 30% and 21.5%, respectively. The block of business covered by the purchase agreement includes the transfer of more than 11,000 policies covering approximately 1.5 million members. Revenue premium on the block was $446 million in 2001.

“The purchase of Royal & SunAlliance’s U.K. group life operations is an excellent example of Canada Life’s acquisition strategy in action,” said David Nield, chairman, president and CEO of Canada Life. “It builds upon our existing strengths in the U.K. group protection market, making us the clear leader in a core business line. And the transaction is financially attractive.”

The purchase price paid for the business is 60 million pounds sterling (approximately C$150 million) in cash. The transaction is expected to be neutral to earnings for the rest of 2002.

Approximately 180 Royal & SunAlliance employees will be retained. It is expected that this staff number will grow by 40 – 50 by transferring certain existing Canada Life employees and by local recruitment in Bristol. Canada Life employees not asked to transfer to Bristol will be given an opportunity to apply for vacant positions within Canada Life’s Potters Bar office.

The transaction is subject to regulatory approval. Both companies expect the transaction to be completed by October 1, at which time, Royal & SunAlliance will reassure its group insurance risks with Canada Life who will administer the insurance. Formal transfer of the business will occur after court approval, expected in mid-2003.