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Zurich Insurance coverage’s plan to switch the Zurich Life Legacy again ebook in Germany to Viridium Holding has collapsed, after Viridium withdrew from the deal.
The transaction, introduced in June 2022, concerned the switch of $20bn of web reserves, predominantly from annuity and endowment merchandise.
Regardless of this setback, the Swiss insurance coverage group stated it stays devoted to resolving the way forward for the portfolio and can think about different choices sooner or later.
Zurich has confirmed that this improvement is not going to influence its monetary targets or capital administration methods.
In a press release, Viridium stated: “The acquisition of an insurance coverage portfolio of Zurich Group Germany by Viridium is not going to proceed as deliberate because of concerns referring to Viridium’s present possession construction.”
Viridium is majority owned by London-based personal fairness investor Cinven.
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As per Reuters’ report, regulatory apprehensions, significantly from German regulator BaFin, might have contributed to the deal’s failure.
BaFin’s reservations doubtless stem from Cinven’s administration of Eurovita, an Italian life insurer that confronted challenges final 12 months amidst rising rates of interest.
Sources stated that the German regulator signalled its intention to dam the transaction, prompting Viridium’s exit from the deal.
After buying Eurovita in 2017, Cinven confronted a scenario the place the insurer’s capital necessities have been considerably larger than the funds Cinven had invested to handle the deficit.
To forestall a disorderly liquidation, Cinven agreed to repurchase €160m ($173.44m) of Eurovita’s debt.
In October 2023, Cinven, together with minority stakeholders Hannover Re and Assicurazioni Generali, initiated the method to promote Viridium.
This sale might probably take away the obstacles which have hindered the Zurich deal, presumably permitting for its revival sooner or later.
Each BaFin and Cinven declined to touch upon the information.
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