Equitable Life to Sell Permanent Insurance Subsidiary for £150 Million

Troubled mutual life insurer Equitable Life is selling its subsidiary Permanent Insurance to rival Liverpool Victoria Friendly Society in a £150 million deal, allowing the company to continue winding down its operations. Permanent provides income protection, life assurance, critical illness, and long-term care products in the UK and has 225 staff, who will remain in their jobs unchanged. The sale is part of Equitable's strategy to shed its assets and liabilities, which have been significantly impacted by a legal ruling in the House of Lords that left the company with obligations of £1.5 billion and over one million customers facing reduced returns on their investments.

Key Takeaways:

• Equitable Life is selling its subsidiary Permanent Insurance to Liverpool Victoria Friendly Society for £150 million, a deal that is expected to be completed early next year.
• The sale includes Permanent's 225 staff, who will continue in their jobs with Liverpool Victoria.
• Permanent provides income protection, life assurance, critical illness, and long-term care products in the UK and had a net income of £12.4m in 1999.
• The sale is part of Equitable Life's strategy to shed its assets and liabilities, which have been impacted by the House of Lords ruling that left the company with £1.5 billion in obligations.
• Liverpool Victoria clearly represented the best value and greatest degree of certainty for the society and its members, according to Equitable's chief executive, Chris Headdon.
• The 238-year-old insurer decided to sell pieces of its business after failing to find a buyer for the whole company.
• Andrew Chapman, managing director of Permanent, stated that the business would be "sad" to leave Equitable.

Statistics:

• £150 million: The value of the sale of Permanent Insurance to Liverpool Victoria Friendly Society.
• £12.4m: Permanent's net income for 1999.
• £1.5 billion: The obligations incurred by Equitable Life following the House of Lords ruling.
• 225: The number of staff at Permanent Insurance who will continue in their jobs with Liverpool Victoria.
• 238: The age of Equitable Life, the world's oldest insurer.
• 40 years: The time period in which Equitable Life will gradually wind down its operations.

Sources:

• "Equitable Life to Sell Permanent Insurance to Liverpool Victoria for £150 million"
• "Equitable Life's Board Chairs Announce Resignation"
• Financial Times
• The Guardian