Zurich to sell its Italian life and pensions back book to GamaLife
- Transaction to release approximately USD 1.2 billion of capital and add 11 percentage points to the Group’s Swiss Solvency Test ratio1
- Significant reduction in the Group’s exposure to credit risk
- Zurich will focus on protection and unit-linked solutions in the Italian life insurance and pension market
- First step in a series planned to significantly improve capital allocation across the Group
Zurich Insurance Group (Zurich) today announced that its subsidiary Zurich Investments Life S.p.A. has agreed to sell its life and pension back book, composed of both traditional and unit-linked policies, to the Portuguese insurance company GamaLife – Companhia de Seguros de Vida, S.A. (GamaLife).
“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. We are confident that GamaLife will continue to provide our customers with the same high quality of service that they expect," said Group Chief Financial Officer George 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.”
The transaction does not change contractual obligations toward policyholders and distributors. Zurich will continue to offer innovative protection and unit-linked solutions to customers in Italy.
“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,” said Matteo Castelvetri, Chief Executive Officer of GamaLife Group. “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.”
The transaction will see approximately USD 9.5 billion of net reserves2 transferred to GamaLife. On completion of the transaction, Zurich’s capital requirement under the Swiss Solvency Test is expected to decrease by approximately USD 1.2 billion, adding approximately 11 percentage points to the Swiss Solvency Test ratio1. In addition, the transaction is expected to increase the Group’s liquidity by approximately USD 200 million3.
The completion of the transaction is anticipated to take place in the second half of this year, subject to regulatory approvals.
1 Completion of the transaction would result in an estimated Swiss Solvency Test (SST) ratio of 214%, on a pro forma basis based on our estimate of 203% as of September 30, 2021, and according to the Group’s internal model approved by the Swiss Financial Market Supervisory Authority FINMA.
2 In accordance with International Financial Reporting Standards (IFRS) and on a pro forma basis as per June 30, 2021.
3 This includes the expected cash consideration of EUR 128 million (approximately USD 148 million, as per September 30, 2021, exchange rates).
GamaLife is a pan-European life and wealth management platform, founded in 2019 and backed by funds advised by Apax Partners, focused on technology and sustainability. GamaLife in Portugal, which is regulated by the Autoridade de Supervisão de Seguros e Fundos de Pensões, held total assets of EUR 3.7 billion and total equity of EUR 233 million as of June 2021 (December 2020: total assets EUR 4.1 billion and total equity EUR 201 million). For more information see: www.gamalife.com.
Downloads
Contacts
- Media Relations
- Investor Relations
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With about 55,000 employees, it provides a wide range of property and casualty, and life insurance products and services in more than 215 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.
Disclaimer and cautionary statement
Certain statements in this document are forward-looking statements, including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives of Zurich Insurance Group Ltd or the Zurich Insurance Group (the Group). Forward-looking statements include statements regarding the Group’s targeted profit, return on equity targets, expenses, pricing conditions, dividend policy and underwriting and claims results, as well as statements regarding the Group’s understanding of general economic, financial and insurance market conditions and expected developments. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results and plans and objectives of Zurich Insurance Group Ltd or the Group to differ materially from those expressed or implied in the forward-looking statements (or from past results). Factors such as (i) general economic conditions and competitive factors, particularly in key markets; (ii) the risk of a global economic downturn, in the financial services industries in particular; (iii) performance of financial markets; (iv) levels of interest rates and currency exchange rates; (v) frequency, severity and development of insured claims events; (vi) mortality and morbidity experience; (vii) policy renewal and lapse rates; (viii) increased litigation activity and regulatory actions; and (ix) changes in laws and regulations and in the policies of regulators may have a direct bearing on the results of operations of Zurich Insurance Group Ltd and its Group and on whether the targets will be achieved. Specifically in relation with the COVID-19 related statements, such statements were made on the basis of circumstances prevailing at a certain time and on the basis of specific terms and conditions (in particular applicable exclusions) of insurance policies as written and interpreted by the Group and may be subject to regulatory, legislative, governmental and litigation-related developments affecting the extent of potential losses covered by a member of the Group or potentially exposing the Group to additional losses if terms or conditions are retroactively amended by way of legislative or regulatory action. Zurich Insurance Group Ltd undertakes no obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or circumstances or otherwise.
It should be noted that past performance is not a guide to future performance. Please also note that interim results are not necessarily indicative of full year results.
Persons requiring advice should consult an independent adviser.
This communication does not constitute an offer or an invitation for the sale or purchase of securities in any jurisdiction.
THIS COMMUNICATION DOES NOT CONTAIN AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES; SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION, AND ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED FROM THE ISSUER AND THAT WILL CONTAIN DETAILED INFORMATION ABOUT THE COMPANY AND MANAGEMENT, AS WELL AS FINANCIAL STATEMENTS.