Standard Life Aberdeen sells insurance business for over £3bn

One of the UK's oldest insurance companies is to be sold for £3.24bn.

Edinburgh-based Standard Life Assurance Limited, which was founded in 1825 and has about 3,000 staff, is being purchased by Phoenix Group.

Announcing the deal, parent company Standard Life Aberdeen (SLA) said it would receive £2.3bn in cash and a 19.9% stake in Phoenix.

SLA said the move completed its move out of insurance to concentrate on asset management.

As part of the deal, SLA said it would expand the companies' existing strategic partnership and look to be "the asset manager of choice" for Phoenix.

SLA co-Chief Executives Martin Gilbert and Keith Skeoch said: "Today's announcement represents a logical next step in Standard Life Aberdeen's journey to build a world-class investment company positioning us strongly for the future."

Phoenix, which is a consolidator of life assurance platforms and operates mostly out of Birmingham, has said about 57% of the new, enlarged workforce will be in Scotland.

The company has committed to retaining its operational headquarters in Edinburgh.

Analysis by Douglas Fraser, BBC Scotland business and economy editor

Twelve years ago, Standard Life was owned by its customers. Forced into floating, it was seen as vulnerable to takeover.

Instead, it has adapted, and is now in a very different shape. It shed its in-house bank. It sold Canadian operations, and floated its joint venture in India.

The biggest change came last August when it merged with Aberdeen Asset Management. Combined, they have more than £650bn of assets under management - that includes pension and insurance funds, other company's cash balances and investments. This is one of Europe's largest asset managers.

The move to shed life assurance focuses it further on asset management, pensions and its new financial advice arm.

It also gives Standard Life Aberdeen a 20% stake in Phoenix, which is seen as a vote of confidence in the specialist insurer's future, and talk of further acquisitions to consolidate the sector.

There is also a vote of confidence in the Edinburgh workforce, becoming the operational headquarters. It may be staff in Birmingham who have more to fear from axing duplicated roles.

It's been a rapid journey from being a staid and unexciting mutual in Edinburgh. Loss of insurance is the end of a long era for the Standard Life brand, but the journey is not for the sentimental, and continues with a view to survival in a competitive, dynamic sector.