Zurich Investments Life S.p.A., an Italian subsidiary of Zurich Insurance Group, is selling its life and pension back book to Portuguese provider GamaLife – Companhia de Seguros de Vida, S.A.
George Quinn, the Swiss insurer’s group chief financial officer, stated: “The sale demonstrates our commitment to improve capital utilization across our life back book. The transaction also reduces our exposure to interest rates and credit risks and allows us to focus on the parts of the Italian life and pensions market where we can best serve our customers.”
According to Zurich, the deal is slated to release more than $1 billion of capital and is the first step in a series of measures aimed at significantly improving capital allocation across the group. Also, the transaction’s completion sometime in the second half of 2022 is set to result in an estimated Swiss Solvency Test ratio of 214%.
“The transaction will see approximately $9.5 billion of net reserves transferred to GamaLife,” noted Zurich. “On completion of the transaction, Zurich’s capital requirement under the Swiss Solvency Test is expected to decrease by approximately $1.2 billion, adding approximately 11 percentage points to the Swiss Solvency Test ratio.”
Moreover, the sale is expected to increase Zurich’s liquidity by approximately $200 million.
“We are confident that GamaLife will continue to provide our customers with the same high quality of service that they expect,” added Quinn. “The Italian life insurance and pension market is important for us, and the recent acquisition of Deutsche Bank’s Italian financial advisor network provides a strong platform for further growth in our preferred products.”
Assurances have been offered that contractual obligations toward policyholders and distributors will not change. It was also stressed that Zurich will continue to provide the Italian market with what were described as innovative protection and unit-linked offerings.
Meanwhile GamaLife chief executive Matteo Castelvetri had this to say: “Together with Zurich, we believe this transaction represents strong strategic alignment between GamaLife’s focus on sustainable growth and Zurich’s intention to exit legacy business in Italy.
“We look forward to welcoming Zurich’s customers. Our focus will be to ensure a seamless transition for all local stakeholders and to bring our values of innovation, simplicity, and service across the enlarged GamaLife group.”
Founded in 2019, GamaLife is a pan-European life and wealth management platform that enjoys the backing of funds advised by Apax Partners.