Specialist lender Hodge is withdrawing from the equity release market as it sells its life assurance arm.
The group announced that it had entered into an agreement to sell 100 per cent of the share capital in its subsidiary, Hodge Life Assurance Company (HLAC), to Reinsurance Group of America (RGA).
HLAC is withdrawing its annuity and equity release products from the market as a result of the transaction, which is subject to regulatory approval. However, the group said it was looking to re-enter equity release "soon" and was working with "third party funders".
The provider will cease issuing new business quotes on annuity and equity release products on February 19 at 5pm, but said an “appropriate” amount of time would be allowed for existing quotes and applications to proceed to completion.
Hodge will continue to sell all other products, including retirement interest-only and holiday let mortgages, adding that it remained “committed” to the later life and specialist lending market.
David Landen, chief executive officer of Hodge Group, 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 the life assurance arm’s growth in recent years had been “limited by its small size and high capital requirements”.
He added: “The sale to RGA provides a strong, stable long-term home for HLAC’s policyholders.”
According to the group, equity release customers will see no change to their terms and conditions, and payments to annuity customers will continue under existing arrangements.
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