Tue, Jan 30th 2024
Viridium Zurich Group Deal stalls, shaking up plans for the Zurich Life Legacy portfolio in Germany, as both sides seek alternate paths forward.
The anticipated acquisition of life insurance policies in Germany by the Viridium Group from Zurich will no longer proceed. Zurich Group disclosed this development on Tuesday, noting Viridium’s decision to abandon the purchase of the “Zurich Life Legacy” in Germany.
Despite this setback, Zurich remains committed to identifying viable alternatives for this collection of traditional life insurance policies. The company assures that this temporary hiccup will not affect its strategic goals or approach to capital management.
Viridium Group, on its part, cited its existing ownership structure as the primary reason for the deal’s collapse, expressing regret over the missed opportunity to benefit customers.
Originally, Zurich’s objective for the sale was to diminish the capital demands of its legacy life insurance portfolios and mitigate interest rate risks. The freed-up capital was earmarked for offsetting profit dilution and fostering growth initiatives.
The transaction would have transferred net reserves to USD 20 billion, predominantly from annuity and endowment policies issued over five years ago. Had the deal gone through, it was projected to boost the Swiss Solvency Test (SST) ratio by approximately eight percentage points, reaching an estimated 242%.
Zurich clarifies that no new ventures are planned for these “legacy” portfolios, which are being phased out, yet the fulfillment of existing contracts remains a priority.
©Keystone/SDA
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