Simon Small has an unusual task as finance chief of Equitable Life Assurance Society: he is winding down the business, instead of growing it.

The world’s oldest mutual insurer can trace its roots back to 1762, but the company’s demise began in 1998. That’s when it started to become clear that Equitable Life would not be able to fulfill promises to buyers of its retirement savings products.

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The firm stopped taking in new funds in December 2000 and some customers withdrew their capital. But other policyholders chose to stay put, which is why Equitable Life has been closing for over 16 years. The process will take another 20 or 25 years, Mr. Small said in an interview with CFO Journal.

The finance chief needs to keep shrinking his costs in line with the number of insurance holders. That means shaving costs with the help of job cuts, zero-based budgeting, automation and other consolidation efforts.

“I have the same toolkit as every other CFO, but I use it for a different purpose,” Mr. Small said.

Since taking office — he joined in 2012 from Lloyds Banking Group PLC — Mr. Small has reduced the number of employees from 437 at the end of 2011 to 221 at the end of 2016. He renegotiated most of the company’s existing contracts, outsourced certain tasks and reduced floor space.

Mr. Small also drove down procurement costs, sold the annuities book and reduced the number of products in the portfolio. At the moment, he is consolidating the firm’s cash books and slashing the number of bank accounts. Costs at Equitable Life’s German, Irish and Channel Islands business are shrinking, too.

Zero-based budgeting, an old-school budget tactic that makes finance managers plan each year’s budget from scratch, is helping to identify additional savings. “I am trying to run the business as efficient as I can,” Mr. Small said.

While the number of policies has gone down from 2 million in 2000 to 407,000 at the end of 2016, assets declined from around £35 billion ($45.4 billion) to £7 billion over the same period.

Mr. Small last year spent £250,000 on a big data system to get better visibility on when customers will most likely withdraw their capital. A guaranteed 3.5%-increase in annual policy value in one type of fund and the 2014 Pension Act result in some policyholders staying longer than originally forecast, he said.

“Some people have decided to sit it out,” said Laith Khalaf, an analyst at Hargreaves Lansdown PLC. “Because of that, Equitable is dying a slow death.”

Low interest rates mean that customers think twice before they withdraw their money. The average age of policyholders is 54, so payouts will peak during the next decade, Mr. Small said. He has budgeted all the costs needed to run the firm until all existing policies expire, he said.

Equitable Life invests a large part of its remaining assets in corporate bonds and U.K. gilts.

One of the challenges is to keep the team motivated while it keeps shrinking. The firm offers to pay for education qualifications for key people. Mr. Small himself did a management program at Harvard University. “Our employees understand that our life as a business will end,” Mr. Small said. “We are trying to make them as employable as possible.”

Some of the products Equitable Life promoted before December 2000 were so called “with profit”-funds that guaranteed annual increases in policy value. Equitable Life was not the only one selling these funds, but its malaise tarnished the reputation of the whole sector, Hargreaves’ Mr. Khalaf said.

It also led to stricter regulatory oversight and the U.K. government compensating investors with £1.5 billion. Investors’ losses totalled to £4.1 billion, according to government calculations.

The Equitable Members Action Group representing investors said Mr. Small is doing a good job. “They [the management] seem to be very effective in trying to return as much capital to investors as possible,” said EMAG representative Paul Braithwaite. The group continues to campaign for additional government compensation for the lack of regulatory scrutiny.

The Financial Conduct Authority which succeeded the previous regulator, the Financial Services Authority, declined to comment. The U.K. Treasury did not immediately respond to a request for comment.

Managing Equitable Life’s wind-down is not as depressing as it might sound, Mr. Small said. It is a “fascinating job,” he said. It is however one that he is unlikely to finish, given his age: Mr. Small is 55 years old.