Zurich Insurance Group to reduce the capital intensity of its legacy life life portfolios with the divestment of its legacy traditional life insurance back book in Germany

Zurich Insurance Group to reduce the capital intensity of its legacy life life portfolios with the divestment of its legacy traditional life insurance back book in Germany

• Sale to further reduce capital intensity and exposure to interest rates
• Reduced sensitivity to interest rates reduces capital required to protect against volatility
• Transaction adds 8 percentage points to Swiss Solvency Test ratio¹
• Zurich in Germany to continue to invest in products and propositions for customers and distributors, maintaining a track record of profitable growth

(PRESS RELEASE) ZURICH, 24-Jun-2022 — /EuropaWire/ — Zurich Insurance Group (SWX: ZURN), Swiss’s largest insurer, has announced the divestment of its legacy traditional life insurance back book in Germany to Viridium Holding AG, a leading specialist in the management of life insurance portfolios in Germany.

“This is, perhaps, the most important step in our efforts to reduce the capital intensity of Zurich’s legacy life portfolios and to lower our exposure to interest rates. As indicated at last year’s investor day, the priorities for capital released by disposals are the elimination of earnings dilution as well as supporting growth,” said Group Chief Financial Officer George Quinn. “Germany is one of our most important markets and has been a significant driver of our customer growth. We will support our team in Germany with the resources required to ensure that this profitable growth continues.”

The transaction includes the transfer of USD 20 billion² of net reserves³, mainly related to annuity and endowment products underwritten more than five years ago.

On completion, Zurich’s Swiss Solvency Test ratio is expected to increase by approximately 8 percentage points¹.

The sale is subject to regulatory approvals and will not change the contractual obligations to customers and distribution partners. As a leading specialist insurer in Germany, Viridium is committed to maintaining the high levels of service that our clients expect.

¹ Completion of the transaction would result in an estimated Swiss Solvency Test (SST) ratio of 242%, on a pro forma basis based on our estimate of 234% at March 31, 2022, and calculated based on the Group’s internal model approved by the Swiss Financial Market Supervisory Authority FINMA.
² As per March 31, 2022, exchange rates.
³ In accordance with International Financial Reporting Standards (IFRS) and on a pro forma basis as per December 31, 2021.

Contact:

Zurich Insurance Group Ltd
Mythenquai 2, 8002 Zurich, Switzerland
www.zurich.com

SIX Swiss Exchange/SMI: ZURN, Valor: 001107539

Media Relations
Malcolm Shearmur, Riccardo Moretto
Phone +41 44 625 21 00
twitter @Zurich
media@zurich.com

Investor Relations
Jon Hocking, Björn Bierfreund, Francesco Bonsante, Samuel Han, Michèle Matlock
Phone +41 44 625 22 99
investor.relations@zurich.com

Zurich Insurance Group (Zurich) is a leading multi-line insurer serving more than 55 million customers – both people and businesses – in more than 210 countries and territories. Founded 150 years ago, Zurich is transforming insurance. In addition to providing insurance protection, Zurich is increasingly offering prevention services such as those that promote wellbeing and enhance climate resilience.

Reflecting its purpose to ‘create a brighter future together’, Zurich aspires to be one of the most responsible and impactful businesses in the world. It is targeting net-zero emissions by 2050 and is one of the world’s most sustainable insurers, as shown by the S&P Global Corporate Sustainability Assessment. In 2020, Zurich launched the Zurich Forest project to support reforestation and biodiversity restoration in Brazil.

The Group has about 56,000 employees and is headquartered in Zurich, Switzerland. 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 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.

SOUORCE: Zurich Insurance Group