Equitable Life pulls its £7bn sale of with-profits

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The insurer that collapsed in the late Nineties, following a disastrous row with policyholders over "guaranteed" annuities, has been offloading parts of its business for years.

Today it said none of the offers it had to take on management of the with-profits business made sense for policyholders.

It said in a statement that the objective of the sale was to establish "whether a third party could improve prospects by way of lower costs or greater expense certainty".

None of the offers passed muster, said Equitable, something it blamed on "the current financial and economic climate".

The sales process is "on hold" and the fund will be managed in-house until the many thousands of policies involved mature.

Chairman Vanni Treves said: "Having carried out this important test of our options for improving prospects for our policyholders, we will now focus on a stable and secure run-off of the society."

Equitable is a mutual, which means it is effectively owned by policyholders. The insurer made a great virtue of this fact in its advertising, claiming that customers would "profit from our principles".

Once it ran into trouble, critics noted that it had no shareholders to share the pain, and policyholders were thrown into panic.

Equitable has recently sold £4.6 billion of non-profit pension annuities to Canada Life and £1.7 billion of with-profits annuities to Prudential. It closed to new business in 2000.