Zurich Assurance has signed an agreement to transfer 3.7bn of its UK annuity business to Swiss Re.
The reinsurance agreement sees Swiss Re take on 3.7bn of assets and 3.9bn in liabilities of Zurich’s annuity business, to be managed by its subsidiary Windsor Life.
Zurich has not actively marketed its annuity business in the UK since 2005 and this transaction is part of its strategy to release capital to focus on its core business of pensions, investments and protection.
The annuity portfolio comprises 220,000 policies and Zurich will write to its annuity customers later this year as part of the transfer process.
Zurich says none of its annuity customers will be materially affected by the transaction. Completion is subject to regulatory and court approvals.
Zurich Global Life chief executive officer Paul van de Geijn says: “Zurich reviews and adapts its product offerings constantly to serve its customers better and remain competitive.
“This allows us to focus our resources on our core business where we are pursuing sustained profitable growth.”
It is expected that the transaction will improve Zurich’s European embedded value by around 50m.