Zurich sells old German life insurance portfolio | News | Currently

Zurich reduces the capital intensity of legacy life insurance policies and lowers interest rate risk. (Image: ZVG)

The sale of legacy traditional life insurance policies to Viridium will further reduce capital intensity and interest rate risk, according to Zurich. The reduced sensitivity to interest rates reduces the need for capital to protect against volatility.

Zurich Insurance Group (Zurich) has agreed to sell its legacy German portfolio of traditional life insurance policies to Viridium Holding. Viridium is a leading specialist in the management of life insurance portfolios in Germany. The sale includes the transfer of $20 billion in net provisions. These relate mainly to pension and endowment insurance policies that were completed more than five years ago, as Zurich announced on Friday. After completion of the transaction, the rate of the Swiss Solvency Test (SST) is expected to increase by around 8 percentage points. Completion of the transaction would result in an estimated SST ratio of 242%. The transaction is subject to regulatory approvals.

“This is arguably the most important step in our efforts to reduce the capital intensity of legacy traditional life insurance policies and reduce our interest rate risk. As communicated at last year’s Investor Day, capital freed from divestitures will be used primarily to eliminate earnings dilution and… to support growth,” said Group Chief Financial Officer George Quinn. Germany is one of Zurich’s most important markets and a key driver of customer growth. “We will support our team in Germany with the necessary resources to ensure this profitable growth continues,” he added.