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Zurich Insurance to sell Italian life and pensions back book to GamaLife – Metro US

Zurich Insurance to sell Italian life and pensions back book to GamaLife

FILE PHOTO: Logo of Zurich Insurance is seen at a
FILE PHOTO: Logo of Zurich Insurance is seen at a former office building in Zurich

ZURICH (Reuters) -Zurich Insurance will release about $1.2 billion of capital by selling its Italian life and pensions back book to Portuguese insurer GamaLife, the Swiss company said on Monday.

The deal will also add 11 percentage points to its Swiss Solvency Test ratio and reduce credit risk exposure significantly, Zurich said.

The transaction is expected to increase Zurich’s liquidity by about $200 million, Zurich said, including a cash consideration of roughly $148 million.

A back book consists of old policies that remain on the books as premium-paying policies.

“The sale demonstrates our commitment to improve capital utilisation across our life back book,” Zurich finance chief George Quinn said in a statement.

“The transaction also reduces our exposure to interest rates and credit risks and allows us to focus on the parts of the Italian life and pensions market where we can best serve our customers.”

The deal does not change contractual obligations toward policyholders and distributors, said Zurich which will continue to be active in the Italian life insurance and pension market.

The Swiss company agreed a deal with Deutsche Bank to buy its financial adviser network in Italy last year.

(Reporting by John RevillEditing by Riham Alkousaa and David Goodman)

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