Zurich Insurance Group, is to sell its legacy traditional life insurance back book in Germany to Viridium Holding AG, a specialist in the management of life insurance portfolios in Germany.
Zurich is a multi-line insurer serving more than 55 million customers, both people and businesses, in more than 210 countries and territories.
The transaction includes the transfer of $20bn of net reserves, mainly related to annuity and endowment products underwritten more than five years ago. The transaction will also see Viridum take over approximately 720,000 policies from Zurich, with assets under management (AUM) of around €21bn.
On completion, Zurich’s Swiss solvency test ratio is expected to increase by around 8 percentage points, Zurich said.
Viridum will see its portfolio grow to around 4.5 million and its AUM to around €92bn.
This is Viridum’s fifth transaction within eight years, which the company said demonstrates its expansion of its market position. Fully continuity is guaranteed for policyholders.
George Quinn, group chief financial officer at Zurich, said, “This is, perhaps, the most important step in our efforts to reduce the capital intensity of Zurich’s legacy life portfolios and to lower our exposure to interest rates. As indicated at last year’s investor day, the priorities for capital released by disposals are the elimination of earnings dilution as well as supporting growth.
“Germany is one of our most important markets and has been a significant driver of our customer growth. We will support our team in Germany with the resources required to ensure that this profitable growth continues.”
Tilo Dresig, CEO of the Viridium Group, added, “The fifth acquisition of a life insurance portfolio is the logical next step in our successful development since 2014. It also underlines that Viridium, with its specialised model of portfolio management geared towards sustainable customer benefits, is firmly established as a reliable partner in the life insurance industry.”
Zurich Municipal recently partnered with Previsico, the live flood warning InsurTech, to boost flood risk resilience across the UK public sector. The service is to be funded by Zurich.
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