Zurich Insurance to Sell Legacy Traditional Life-Insurance Back Book in Germany

By Mauro Orru

Zurich Insurance Group AG on Friday said it had agreed to sell its legacy traditional life-insurance back book in Germany to specialist insurer Viridium Holding AG, in a move to shield its business from rising interest rates as central banks move to curb inflation.

The Swiss insurance giant said the deal, which includes the transfer of $20 billion in net reserves, would add 8 percentage points to its Swiss solvency test ratio--a measure to assess the capitalization of insurance companies.

"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," Chief Financial Officer George Quinn said.

"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," Mr. Quinn added.

Zurich Insurance said it would continue to invest in Germany, one of its most important markets, despite the move it said was needed to protect against volatility.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

June 24, 2022 03:05 ET (07:05 GMT)

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