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Zurich pledges UK commitment

The Zurich Financial Services Group is stressing its commitment to the UK life industry after a deal which will see it close Zurich Life and sell it to Swiss Re for £285m.

The deal includes £149m cash to be paid when the transaction is completed, expected to be by the end of the year, with the balance paid as dividends before completion. Zurich Life will close to new business on August 27.

Zurich claims it is not getting out of the UK life business but is looking to use the capital to strengthen its other UK life operations.

The company still operates Allied Dunbar, Eagle Star and Stirling in the UK.

In June, Zurich sold Threadneedle Asset Management to American Express for £340m.

Zurich Life&#39s total annual premiums were £73m last year and new business premiums were £12m in equivalent premium income, 2 per cent of Zurich&#39s overall UK life new business figures.

Group head of media Daniel Hofmann says: “What we are getting out of is a very small fragment of that UK life business. Two per cent of our total life premiums is now what we are selling to Swiss Re and that business has become commoditised over the years with very low margins for us.”

Zurich Financial Services UK, Ireland, South Africa, Asia Pacific business division chief executive Sandy Leitch says: “We are transforming our life business in the UK. This involves sharpening our focus, reducing expenses, strengthening our overall capital position and growing profitable new business.”

Commerzbank insurance analyst Roman Cizdyn says: “Basically, I think that it is a part of the process of withdrawing capacity. Zurich Life is not a large part of its UK business.”

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