To further reduce capital intensity and exposure to interest rates, Zurich Insurance Group is offloading its legacy traditional life insurance back book in Germany.
Financial terms of the sale to specialist insurer Viridium Holding AG were not disclosed.
Commenting on the transaction, group chief financial officer George Quinn 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.”
According to Zurich, the divestment will not change the contractual obligations to customers and distribution partners, with Viridium committed to maintaining the high levels of service expected by clients. When completed, the sale is set to raise Zurich’s Swiss Solvency Test ratio by approximately eight percentage points.
