Zurich Insurance Group agreed to sell its Italian life and pensions back book to Portuguese insurer GamaLife, the first step in a plan by the Swiss company to improve capital allocations.
The transaction will release about $1.2 billion of capital, improve Zurich’s solvency ratio and reduce exposure to interest rates and credit risk, the insurer said in a statement Monday. Zurich will maintain its contractual obligations toward policyholders and distributors.
“The sale demonstrates our commitment to improve capital utilization across our life back book,” said Chief Financial Officer George Quinn.
The market for back books -- life insurance products that are no longer sold but managed until maturity -- is one of the most active in financial-services deals, as insurers seek to free up capital. Bloomberg reported last year that Zurich was exploring selling a chunk of its Italian life insurance portfolio.
