The Swiss insurance giant expressed its commitment to resolving the matter concerning the portfolio, which oversees approximately 700,000 life insurance policies in Germany, and affirmed its determination to explore alternative options.
Zurich stated that that the inability to divest the business would not affect its financial objectives or capital management strategies.
In June 2022, Zurich had disclosed the agreement to sell its legacy traditional life insurance back book for slightly under 500 million euros. As part of the deal, Zurich indicated in 2022 that it would transfer $20 billion of net reserves, predominantly associated with annuity and endowment products.
“Zurich is committed to finding a solution for this portfolio and will explore options in due course,” an official statement from Zurich said.
Zurich’s update followed a statement from Viridium, citing the deal’s termination “due to considerations relating to Viridium’s current ownership structure.”
According to a report by Reuters, speculation suggests that regulatory concerns regarding Viridium’s ownership by private equity firm Cinven may have derailed the transaction. Cinven, headquartered in London, declined to comment.
Unnamed sources from the Reuters story also revealed that German regulator BaFin signalled its intention to block the deal, prompting Viridium’s withdrawal.
Potential apprehensions may stem from Cinven’s involvement with Italian life insurer Eurovita, acquired in 2017, which encountered challenges amid rising interest rates last year. Eurovita faced capital deficiencies at least four times greater than the amount Cinven injected to address the shortfall. Cinven subsequently committed to repurchasing 160 million euros of debt to avert a disruptive liquidation process.
So far, BaFin has also refrained from commenting.