Zurich Insurance Group (Zurich) has agreed to sell its legacy traditional life insurance back book in Germany to Viridium Holding AG (Viridium), a leading specialist in the management of life insurance portfolios in Germany.
Viridium said the deal comprised around 724,000 policies and €21bn in assets under management.
Zurich 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."
Zurich in Germany would continue to invest in products and propositions for customers and distributors, maintaining a track record of profitable growth, it said.
The transfer of assets is 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%.
The sale is subject to regulatory approvals and will not change the contractual obligations to customers and distribution partners.
In 2019, Viridium bought the majority of Italian insurer Generali's German life insurance unit.
Viridium said that with the Zurich deal, its portfolio will grow to 4.5 million policies and €92bn euros in assets under management.
