The reinsurance agreement between the companies means that Swiss Re will take on £3.7bn of assets and £3.9bn in liabilities of Zurich’s annuities business and this will be managed by Windsor Life Assurance Company which is a Swiss Re subsidiary.
Zurich has not actively marketed its annuity business in the UK since 2005 and this transaction is part of the life group’s strategy to release capital in order to focus more on its core business of pensions, investments and protection.
Zurich stresses that none of its annuity customers will be materially affected by the transaction.
The completion of the transaction 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 to remain competitive. This allows us to focus our resources on our
core business where we are pursuing sustained profitable growth.”
The annuity portfolio transferred covers approximately 220,000 policies.
Zurich will be writing to all affected customers later this year as part of the process to formally transfer the book to Swiss Re.
It is expected that the transaction will have a positive impact of approximately £50 million on the Zurich European Embedded Value.