ReAssure, based in the town centre, has been snapped up by the Phoenix Group, which has cemented itself as Europe's biggest owner of life assurance funds closed to new customers.
Swiss Re, the world's second-largest reinsurer, had wanted to spin off its ReAssure division earlier this year with a stock market flotation, but pulled it in the summer.
The deal will see Swiss Re pocket £1.2 billion in cash from the deal and also take a stake in Phoenix of between 13 per cent and 17 per cent, while ReAssure's minority shareholder, MS&AD Insurance Group, will receive shares in Phoenix representing an 11 per cent to 15 per cent stake.
It means the new business will have assets under its control of £329 billion, with 14.1 million policies, and comes three years after Phoenix snapped up Standard Life Assurance in 2016 for £2.9 billion, which saw Standard Life Aberdeen also retain a stake in combined group.
Bosses said the deal is expected to generate additional cash flows of approximately £7 billion, with £2.7 billion expected to be generated between 2020 and 2023 and a further £4.3 billion from 2024 onwards.
Swiss Re chief executive Christian Mumenthaler said: "Phoenix is a natural acquirer of ReAssure and has a proven track record of delivering value to both shareholders and customers."
Swiss Re's ReAssure specialises in buying up life insurance policies that other insurers no longer want. Before the deal it managed three million policies and £40 billion of assets.
The deal comes five months after Swiss Re pulled a planned stock market listing for ReAssure after failing to get enough enthusiasm for the deal from potential investors.
Bosses had hoped for a valuation of £3.3 billion, so Friday's announcement is not far off the total they were looking to achieve.
But listings have proved difficult this year, with several failing to impress once coming to market, leading investors to be more cautious before buying into newly listed companies.
ReAssure employs about 2,500 across five sites in the UK and is one of the largest employers in Telford.
It moved to the town to its purpose-built Windsor House in Telford town centre as Windsor Life Assurance in 1987.
The business had started in 1963 as The Occidental Life Insurance Company. In 2011 it was re-branded as ReAssure.