Financial services firm Hodge has agreed to sell its Hodge Life Assurance unit to the Reinsurance Group of America, as the Cardiff-based group focuses on its specialist lending business.

The group says Hodge Life Assurance will withdraw its products from the market as a result of the deal, ceasing to sell annuities and equity release mortgages.

However, Hodge will continue to sell all other existing products including retirement interest-only and holiday let mortgages and “remain committed to the later life and specialist lending market”.

Hodge says the sale, for an undisclosed fee, allows it “to focus on scaling its specialist lending business and continue its recent growth in these markets”.

The group, which owns Hodge Bank, says the deal is subject to regulatory approval.

Hodge Group chief executive David Landen says: “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.”

Landen adds: “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.”

RGA executive vice president, global financial solutions Larry Carson says the acquisition “demonstrates RGA’s continued strong support of the UK market and our commitment to working with our clients around the world to provide capital and risk-management solutions,” in a separate statement issued on the New York Stock Exchange.

It adds Hodge Life Assurance has annuity liabilities of approximately £570m.

Hodge Life Assurance managing director Deian Jones adds that the unit “in recent years has been limited by its small size and high capital requirements.”

Jones adds that the sale to RGA “provides a strong, stable long-term home” for Hodge Life Assurance policyholders.

Hodge says its withdrawal from new business will take effect on 19 February 2021 at 5pm UK time, when it will stop issuing new business quotes on its annuity and equity release products.

It adds: “There will be no change to the terms and conditions for our equity release customers, and payments to our annuity customers will continue under existing arrangements.”