The Co-operative is returning to the life insurance market six years after selling its business to pay off debt.Â
Royal London, which paid ÂŁ220m for the Co-opâ€™s life insurance business in 2013, will underwrite the Co-op product.
The Manchester-based mutual is starting to re-enter markets it abandoned as part of a rescue plan to stave off collapse in 2013 â€” but wants to do so without committing large amounts of investment. It believes its brand and bespoke products will attract customers, especially among its 4.6m members.Â
Last month the Co-op announced a deal to sell its general insurance underwritingÂ business to MarkerstudyÂ for ÂŁ185m. It will also develop its own branded products in that market and already has branded travel insurance cover.
The Co-op was forced to sell large chunks of its business after discovering a ÂŁ1.5bn capital hole in itsÂ banking subsidiaryÂ in 2013. The bank has been disposed of and debt reduced from ÂŁ1.8bn to about ÂŁ800m. Its core grocery and funeral arms are trading well and it is seeking ways of offering more products to members who want to support the business they jointly own.
The group moved back into healthcare last year with the purchase of Dimec, an online pharmacy.Â The Co-opÂ sold its chain of chemists to Bestway for ÂŁ620m in 2014.
â€śThe Co-op is returning to its rootsâ€‰.â€‰.â€‰.â€‰it has proven expertise across its 175-year history and within insurance and healthcare, it is developing new solutions for members in an agile and capital-light manner,â€ť the business said.Â
Those buying the Co-opâ€™s life insurance will be able to takeÂ two six-month payment holidays throughout the lifetime of the policy after a 12-month qualifying period. They could then reduce cover rather than pay back the shortfall. They can also opt for critical illness protection.Â
Pippa Wicks, deputy chief executive of the Co-op, said: â€śLife insurance is not new territory for us, we have a rich history in this area and we can see a clear need to come back into this sector and provide a distinctive Co-op solution for our members.â€ť
The Co-op has more than 2,500 food stores and 1,000 funeral homes.