DORSET-based LV= has agreed a deal to take over the majority of the business of its fellow mutual Teachers Assurance.

Teachers Assurance, founded in 1877, employs around 115 people in Deansleigh Road, Bournemouth, and specialises in financial products and services for the education sector.

Its business is endorsed by the National Union of Teachers.

The deal is subject to approval by regulators and Teachers’ members and it is expected to be completed in early 2016.

LV= group CEO Mike Rogers said: “We believe Teachers Assurance offers good value to our members and is complementary to our existing business lines where we already have significant scale. This acquisition is further demonstration of our continued financial strength and will help with our strategic intention to continue to grow the life part of our business.

“LV= offers a wide range of good value financial products backed up by an excellent level of customer service, meaning we are well placed for profitable growth. We already have plans to launch a financial advice service to the teaching profession following this deal.”

LV= is the UK’s largest friendly society and a leading insurer, managing £10.3bn of assets on behalf of members and policy-holders and employing 6,000 people nationwide.

Teachers Assurance manages around £1bn on behalf of members and policy holders, with 40,000 with-profits policies, 32,000 life and pensions policies and 13,000 homes and buildings insurance policies.

The deal does not cover Teachers’ 19,000 unit trust policies, which are the subject of a separate deal to transfer them to Threadneedle Investments.

Mr Rogers added: “We hope to be able to redeploy many Teachers Assurance employees into the wider LV= group when, subject to member and regulatory approval, it becomes part of LV= in early 2016.

“We expect the deal to be earnings and cash flow positive within 12 months of completion and the impact on surplus capital is not material.”

David Furniss, Teachers’ group chief executive, said: “Our two societies, both with Bournemouth based headquarters, share a long history of mutuality and a common ethos when it comes to our commitment to delivering value and service to members.

“We believe that this transfer to LV= will allow our members and policyholders to benefit from greater economies of scale than if we were to remain independent, as well as a wider range of products and services.”

A vote by Teachers Assurance members is expected in 2015 and will be managed by the business’s current management team. Information packs will be sent out in advance.