London, United Kingdom (CU)_ Zurich Investments Life S.p.A., a division of Zurich Insurance Group, has agreed to sell its life and pension back book to GamaLife. GamaLife was established in 2019 and is a pan-European life and wealth management platform backed by Apax Partners’ capital. It was assured that contractual duties to policyholders and distributors would remain unchanged. Additionally, Zurich stated that it will continue to support the Italian market with new protection and unit-linked services.
George Quinn, group chief financial officer of Zurich insurance, highlighted the benefits of the deal. He stated, “The sale demonstrates our commitment to improve capital utilisation 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.”
According to Zurich, the transaction would free up over $1 billion in capital and is the initial move in a series of steps targeted at dramatically increasing the firm’s capital allocation. Additionally, the acquisition is also expected to close in the second half of 2022, resulting in a Swiss Solvency Test ratio of 214 percent. Zurich highlighted some specifics of the transaction. It said, “The transaction will see approximately US$9.5 billion of net reserves transferred to GamaLife. On completion of the transaction, Zurich’s capital requirement under the Swiss Solvency Test is expected to decrease by approximately US$1.2 billion, adding approximately 11 percentage points to the Swiss Solvency Test ratio.”
Additionally, the transaction is projected to add around US$200 million to Zurich’s liquidity. Quinn expressed confidence in the services of GamaLife. He said, “We are confident that GamaLife will continue to provide our customers with the same high quality of service that they expect. 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.”
Matteo Castelvetri, chief executive of GamaLife, expressed optimism over the deal. He said, “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”. He added, “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.”
