Hodge will sell 100% of the share capital in its subsidiary Hodge Life Assurance Company Limited (HLAC) to Reinsurance Group of America, Incorporated (RGA).
HLAC says it will withdraw its products from the market as a result of this transaction and will cease selling annuities and equity release mortgages.
Hodge will continue to sell other existing products including RIO (retirement interest only) and holiday let mortgages and says it remains committed to the later life and specialist lending market.
Hodge has also hinted that it may re-enter the market in the future using third-party funders.
The transaction is subject to regulatory approval.
The sell off, for an undisclosed sum, will allow Hodge group to focus on expanding its growing specialist lending business.
David Landen, Hodge Group CEO, said: “This is a significant transaction for Hodge; allowing us to focus and grow across our specialist markets through Hodge Bank. Later life lending remains a key part of our business and we will continue to evolve and develop our product range.
“As a result of the sale, we are withdrawing from the equity release market. However, as the longest established equity release lender in the UK, we are looking at opportunities to re-enter this market soon, working with third party funders.”
Deian Jones, managing director of HLAC, said: “HLAC’s growth in recent years has been limited by its small size and high capital requirements. The sale to RGA provides a strong, stable long-term home for HLAC’s policyholders.”
The withdrawal of new business will take effect on 19 February when Hodge will cease issuing new business quotes on its annuity and equity release products.
Hodge Group was advised by Fenchurch Advisory Partners (as financial adviser) and Burges Salmon LLP (as legal adviser).
The Hodge Foundation, a charity supporting the welfare, medical, academic and educational areas, owns 79% of Hodge.