Posted on Mar 03, 2010 by Sergio Ulloa
Lloyds Banking Group plc (LBG) of the UK has sold 70% of its stake in esure, an Internet-based insurer, for approximately US$289 million. With this sale, LBG intends to regain focus on its core general insurance business through its brands of Halifax and Lloyds TSB.
The buyer of esure's 70% stake is esure Group Holdings Ltd., a buyout vehicle of esure's chairman and co-founder, Peter Wood. Using the Internet as the main sales channel, esure offers home, motor, travel and pet insurance.
Lloyds had originally inherited esure after its takeover of home mortgage bank HBOS early last year. The disposal of the 70% stake in esure by LBG forms part of the disposal of UK assets as per a state-aid ruling from EU regulators late in 2009, since Lloyds is now 43% owned by the state.
The impact of this sale on the accounts of LBG is not expected to be material.
Lloyds Banking Group plc
Lloyds TSB Group plc was renamed Lloyds Banking Group plc on 19 January 2009, following the acquisition of HBOS plc. This makes us the largest retail bank in the UK with a number of leading market positions. Our goal is to be the best financial services provider in the UK. We believe this means we must build a leadership position not on the basis of scale but on the foundations of reputation and recommendation.
esure was founded in 2000 by Chairman, Peter Wood, to offer competitive insurance cover by using the Internet as a primary sales channel. Mr Wood pioneered the direct selling of insurance over the telephone back in 1985, when he launched Direct Line. With esure, his aim was to go a step further and harness the efficiency of the Internet to give a better deal to responsible drivers and careful homeowners.