THE UK’s oldest mutual life insurance company, Equitable Life, is being bought by specialist insurer Life Company Consolidation Group (LCCG) for £1.8 billion.

The company, established in 1762, has 300,000 policyholders and manages assets of £6.3 billion. The sale will give policyholders an average windfall of £6,900 each, according to financial planners Hargreaves Lansdown, when it closes its with profits fund and the deal completes.

Equitable Life closed to new customers in 2000 after it came close to collapse. It led to with profits funds falling out of favour, with the entire sector having to cut policy values as markets tumbled.

Its policies will transfer to LCCG’s Reliance Life subsidiary, with the deal due to complete by the end of 2019. Reliance Life specialises in life insurance businesses that are closed to new policyholders.

LCCG, which bought its first UK life business last year, has operations in Britain, Ireland and the Isle of Man and policyholder assets of more than £30bn. It is backed by funds managed by Oaktree Capital Management.

Equitable Life was advised on the sale by Goldman Sachs.

Ian Brimecome, chairman of Equitable Life, said: “While it will be sad to bring an end to the oldest mutual assurer in the world, the potential to enhance with-profits policy values to the extent made possible by a transfer to Reliance Life is fundamentally helpful in distributing capital to our policyholders as fairly and as soon as possible.”

Danny Cox, chartered financial planner with Hargreaves Lansdown, said: “This is a wonderful windfall for Equitable Life policyholders, who now stand to pick up a nice bonus as the with profits fund and Equitable Life shuts up shop for good.

“There’s still a bit of a wait, but the uplift is so substantial it’s well worth hanging on for.”