Chesnara said the acquisition would enhance the future cash generation of the group, with around £140m expected in the first five years after completion.
The group said it was expected that there would also be an increase in its dividend trajectory and that it would lead to its inclusion in the FTSE 250 index.
This will add around £4bn of assets under administration to the Chesnara group, as well as approximately 454,000 policies.
The completion is expected in early 2026, subject to regulatory approval.
On completion, around 230 roles will transfer to Chesnara, and both parties will work to enable a smooth transition.
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This transaction is part of the implication of the HSBC group as announced in October last year, where it said it would be focused on increasing leadership and market share in areas where it has a “clear competitive advantage” and has the most opportunities to grow and support clients.
Steve Murray, chief executive of Chesnara, said: “The proposed acquisition of HSBC Life represents a material step up in scale for Chesnara Group. HSBC Life is a high-quality business operating in products that we know well and is capable, under our ownership, of generating substantial cash flows for many years. This highly accretive transaction will allow us to build on our strong, 20-year track record of uninterrupted dividend growth. It is also a further example of a major financial institution choosing to work with us, enhancing our reputation as a leading life and pensions consolidator. We are continuing to see a strong M&A pipeline across our group, which we are well-positioned to execute on.
“We look forward to welcoming HSBC Life policyholders and the HSBC Life team to Chesnara and working closely with HSBC Bank to ensure the smooth transition of the business into the group.”
Last month, HSBC Life became a signatory of the Protection Distributors Group’s Claims Charter.
