17 December 2018Insurance

Zurich sells $2bn portfolio to Catalina

Zurich Insurance Group has agreed to sell its pre-2007 UK legacy employers’ liability policies portfolio to Bermuda-based specialist acquirer of legacy insurance portfolios Catalina Holdings.

As of Dec. 31, 2017, the portfolio comprised gross liabilities of $2 billion relating principally to industrial disease related claims, including asbestos.

“The sale of this portfolio reflects Zurich’s strategy to eliminate or reduce exposure to legacy lines of business,” said George Quinn, Zurich group chief financial officer. “This focus on actively managing capital allocation to improve overall returns will continue in 2019,” Quinn added.

As part of the deal Zurich Insurance will enter a reinsurance agreement with Bermudan reinsurer Catalina General Insurance. The policies and liabilities will be transferred to Catalina London. The transaction is subject to regulatory and court approvals, with the final transfer expected to occur within two years.

In the fourth quarter of 2018 upfront expenses related to the transaction are expected to lead to a small loss recognized in Zurich's business operating profit, while over the full period to completion of the transfer of the policies the company expects to achieve an overall positive contribution to the business operating profit.

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More on this story

17 April 2019   Bermuda-based insurance group Enstar has signed an agreement with Zurich Insurance Group to reinsure its US asbestos and environmental liability insurance portfolios.
19 July 2019   Bermuda-based Catalina Holdings has appointed Steve Ryland as chief executive of its UK operations as part of the company's effort to strengthen its global management team.
5 December 2019   Catalina aims to use ACR and Singapore as a hub to build a strong Asian run-off platform.