The start of the new year saw the end of Equitable Life after a deal to buy the remaining business of the 250-year-old insurer was completed on New Year’s Eve.
The firm, once the world’s oldest mutual insurer, came close to collapse in 2000 after it was unable to make insurance and pension pay-outs to nearly a million policyholders. While the firm stopped accepting new customers in 2000, a rump business continued to service older policies until they ended.
Utmost, a life and pension firm that Financial Times says specialises in the old books of life insurance businesses, agreed to buy Equitable’s remaining business in June 2018 – a deal that covers more than 300,000 policyholders and £6 billion in assets. However, it has taken 18 months to win the approval of policyholders, regulators, and the courts.
“Everything took a bit longer than expected,” Ian Maidens, chief financial officer of Utmost, told Financial Times. “Everything associated with Equitable gets that extra bit of attention because it has been a high-profile problem child for the best part of 20 years.”
According to Financial Times, many of the customers who are still with Equitable have agreed to give up financial guarantees as part of the deal, in return for the value of their policies increasing between 65% and 75%.
“People were better off with the uplift,” Maidens told Financial Times. “The uplift gives away the capital of [Equitable].”
