Zurich’s major deal with Viridium for German life book collapses

The planned sale of Zurich Insurance Group’s German life insurance portfolio to Cinven’s Viridium Group has been called off.

The Swiss insurer said Tuesday (January 30) that Viridium Group will not complete the purchase of Zurich Life Legacy in Germany as initially intended.

Despite the setback, Zurich reaffirmed its commitment to finding an alternative solution for the portfolio and stated that it would explore options in due course. The company emphasised that this development would not impact Zurich’s targets or capital management plans.

In June 2022, Zurich had entered an agreement to sell its traditional life insurance back book in Germany to Viridium Holding AG, a specialist in the management of life insurance portfolios in Germany, in a bid to reduce capital intensity and exposure to interest rates.

The deal included the transfer of $20 billion of net reserves, mainly related to annuity and endowment products underwritten more than five years ago.

Had the transaction been successful, it was projected to bolster Zurich’s Swiss Solvency Test ratio by around 8 percentage points.

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