(CercleFinance.com) – Zurich announced on Friday the sale to Viridium of a portfolio of life insurance contracts in Germany, an operation that will allow it to alleviate certain solvency constraints that have hitherto weighed on its shoulders.
By separating from this closed portfolio, which no longer registers new life insurance policies but which remains recorded in its accounts, the Swiss insurer intends to reduce the capital intensity of its activities and limit its exposure to the evolution interest rates.
The operation provides for the transfer to Viridium – which specializes in the management of insurance portfolios – of some 20 billion dollars of net reserves which had to be set aside under prudential rules.
Once finalized, the sale should result in an improvement of approximately eight percentage points in its Swiss solvency ratio (‘Swiss Solvency Test’).
Viridium, for its part, is committed to maintaining the highest level of service to customers affected by the sale, assures Zurich in its press release.
The transaction was welcomed by investors on the Zurich Stock Exchange, where the title of the insurance group climbed 2.4% Friday mid-morning.