Canada Life UK has agreed to dispose of 155,000 longstanding policies with assets of £2.7bn from its closed book of business to Scottish Friendly.

The deal is part of the insurer’s strategy to focus on the annuity market.

The business that is being sold includes life and pensions savings policies and some protection policies, all written in the UK. The legacy policies have been closed to new business since 2003.

Under the terms of the agreement, Canada Life Investments will continue to manage a large portion of the transferred unit-linked assets.

Canada Life UK CEO Doug Brown said: “This is an excellent move for both organisations, for Scottish Friendly by increasing its scale and for Canada Life to concentrate its resources around its core business strategy. Our priority is ensuring customers receive the highest standards of care both during this transition period, and beyond.

“This was a difficult decision – many of these customers have been with us for years, arriving through acquisition or organic growth. However, following close evaluation it was clear that the sale is the right thing to do.”

Pending receipt of regulatory approval, the transfer is expected to conclude next year.