Zurich to sell its legacy traditional life insurance back book in Germany to Viridium
Zurich has agreed 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.
The transaction includes the transfer of $20 billion of net reserves, mainly related to annuity and endowment products underwritten more than five years ago.
On completion, Zurich’s Swiss Solvency Test ratio is expected to increase by approximately 8 percentage points.
“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.” – Group CFO George Quinn.
The sale is subject to regulatory approvals and will not change the contractual obligations to customers and distribution partners.