DORSET-BASED LV= (formerly Liverpool Victoria) has entered into an option agreement to acquire the new business operations of Tomorrow (formerly GE Life business) from Swiss Re.

The option will become exercisable in late December 2007, subject to regulatory approval.

LV= has also entered into a distribution agreement under which Tomorrow's enhanced annuities, equity release lifetime mortgages and pension products will be distributed under joint LV= and Tomorrow branding from July 1.

Following a strategic review, LV= identified flexible retirement products as a growth market.

Tomorrow is a leading provider of flexible retirement solutions, selling £785 million of new single premium business in 2006.

From January 1 2008, LV= would integrate Tomorrow's new business operation and offer its products under the LV= brand.

LV= would retain Tomorrow's new business operations in Hitchin, Hertfordshire and its regional sales offices.

LV= group chief executive Mike Rogers said: "The proposed acquisition of the new business capability of Tomorrow will give us a strong market presence in three flexible retirement product sectors, with an established and well-regarded IFA distribution network.

"This proposed acquisition is in line with our strategic vision to expand our proposition into the flexible retirement market. It transforms the growth prospects for our life business, and should create substantial value for our members."

Swiss Re's UK Admin Re MD Jonathan Yates added: "LV= will invest in the people and products required to grow these lines of business.

"This agreement honours the commitment we made to the market, employees and customers to maintain this business as a going concern," said Mr Yates, who was responsible for overseeing Swiss Re's purchase of Tomorrow from GE group.