MILAN (Reuters) – Swiss insurer Zurich is seeking to get rid of an Italian portfolio of life insurance policies with a net worth of around 200 million euros ($ 243 million), two people said close to the file.
The process, which targets specialist investors, often backed by private equity or reinsurance companies, follows similar deals in the industry where negative interest rates have weighed on the life activities of companies.
UBS is working with Zurich on the sale of Italian life insurance policies, the two sources told Reuters. UBS declined to comment.
The challenge of paying guaranteed returns on certain life insurance policies coupled with stricter European capital rules have prompted companies such as Generali and Prudential to sell life insurance portfolios that are closed to new clients.
Zurich is also considering selling its German life books business, multiple sources told Reuters.
However, analysts and bankers say the plan can be tricky because all of Zurich’s German life business is hosted by Deutscher Herold, which uses backbook cash flows to fund new business.
Separating the two operations will take time. “We do not comment on rumors or market speculation,” a Zurich spokesperson said in an email to Reuters.
“Zurich is one of Germany‘s most financially sound insurers and will continue to focus on P&C and life insurance as well as our commercial insurance business,” the spokesperson added.
Zurich told an Investor Day 18 months ago that it was looking to focus on “capital liberation” across its business.
Consolidation in Italy’s insurance sector intensifies after market leader Generali last week announced a takeover bid of up to â¬ 1.17 billion for rival Cattolica, which it plans to launch in autumn.
($ 1 = 0.8218 euros)
(Reporting by Gianluca Semeraro and Valentina Za in Milan, Carolyn Cohn in London, Arno Schuetze and Alexander Huebner in Frankfurt and Oliver Hirt in Zurich; editing by Alexander Smith)