National Mutual sold to GE Capital for £570m

Members of the National Mutual Life Assurance Society are in line for windfalls of up to £2,300 after the 105-year-old organisation yesterday banged another nail in mutuality's coffin and accepted a £570m takeover bid from GE Capital of the US.

All 160,000 National Mutual with-profits policyholders are guaranteed a £500 windfall, with a further £290m being shared among them in the form of enhanced final bonuses.

Gavin Hill, National Mutual's managing director, said the group was abandoning mutuality in favour of the financial security afforded by being part of a larger group. "Since we announced we were seeking buyers in March, we had a very large number of people approach us," he said.

Mr Hill was unsure of his future role in the business, but he will be overseeing integration into GE over the next nine months. As a policyholder, he will be receiving windfalls, he said.

GE said the purchase enhanced its capacity to distribute retirement products among independent financial advisers. The National Mutual brand would give way to that of GE, but GE would not be making significant job losses. The firm has guaranteed it will not raise investment or administration charges at National Mutual for the next 10 years.

Clive Cowdery, chairman of GE Insurance Holdings, said: "Mutuals are coming to realise that there's something about being a mutual that doesn't help, whether it be that IFAs don't support them or they can't afford to fund expansion plans."

GE failed to buy Equitable Life in February and Scottish Life last year. It is thought to have beaten off Aegon, a Dutch rival, for National Mutual.