The buyout is subject to regulatory approval and a vote from Teachers Assurance members in 2015.
Teachers Assurance, which is the trading name for Teachers Provident Society, offers products and services for education professionals such as life and pensions and general insurance.
Mike Rogers, LV= group chief executive, 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= manages £10.3bn of assets on behalf of members and policyholders while it employs 6,000 people nationwide.
Teachers Assurance manages £1bn, offering a range of products including with-profits (40,000 policies), life and pensions (32,000 policies) and home and buildings insurance (13,000 policies).
The deal will not include Teachers Assurance’s unit trust business (19,000), which is being transferred to UK-based Threadneedle Investments.
As part of the transaction Teachers Assurance members will become members of LV=, benefitting from free legal advice, discounts and a member support fund.
Rogers added: “Teachers Assurance, like LV=, has its head office in Bournemouth and as a result 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.
“We will be working closely with the current executive team over the coming months to ensure a smooth handover.”
