The deal will mean Bain Capital effectively acquiring LV= which is set to demutualise prior to the takeover.
LV= says the takeover represents a good deal for members and the new investment will help the firm to grow.
The acquisition is subject to regulatory approval and approval from LV= members. If this happens, the takeover is expected to complete by the end of 2021.
Members of the mutual are due to vote on whether to accept the takeover in the first half of 2021.
Bain Capital has been in exclusive talks with LV=, more formally known as Liverpool Victoria Financial Services Limited, since October.
LV= says that the capital available for distribution is expected to increase by up to 40% as a result of the transaction and this money will be used to increase payments to with profits members as their policies mature.
Under the proposal LV=’s with profits business will be ring-fenced in a separate fund and closed to new business.
Alan Cook, Chairman of LV=, said: “As a newly standalone life and pensions business in an increasingly competitive market, the board recognised that LV= required significant long-term investment to be sustainable.”
Mark Hartigan, CEO of LV=, said: “The partnership with Bain Capital recognises the opportunity to further invest to develop LV= at a time when it is well positioned, growing market share, expanding its products and trading resiliently, despite the pandemic.
“While our corporate structure will change, our culture and values remain the same. The board is excited by the opportunities it creates for our people, partners and customers – enabling the LV= brand and business to further develop as a major force in the UK life insurance market.”
Matt Popoli, global head of insurance, Bain Capital Credit, said: “We are investing in a unique company with an impressive management team and employee base, that is already well positioned in the market, with a clearly established product set, strong IFA relationships and a reputation for customer excellence.”
As a result of the deal and demutualisation all members are expected to benefit from a cash payment to compensate for loss of mutual membership on completion of the transaction, LV= said.