SWITZERLAND/UK - Zurich Financial Services has continued selling-off its non-core business division by divesting the business of Zurich Life Assurance Company (Zurich Life) to Swiss Re for US$460m.
Swiss Re is to acquire the closed book of Zurich Life for a cash payment of approximately US$240m and a further US$220m in dividends.
On completion of the transaction, Swiss Re will take on responsibility for the administration of Zurich Life’s 225 000 policies. Zurich Life’s total annual premiums in 2002 were US$118m and new business premiums in 2002 were US$19m.
Zurich Life will no longer accept new business with effect from August 27, 2003. Servicing and administration of the closed business will transition to Computer Sciences Corporation, Swiss Re's third party administrators in 2004.
This will be Swiss Re’s first Admin Re transaction outside of the US. The Admin Re line of business is the acquisition of books of life and health policies that have been or will be placed into run-off , typically assuming the responsibility to administer the underlying policies.
The move follows Swiss Re's expansion of its Admin Re business, beyond its original base in the United States.
John Fitzpatrick, head of Swiss Re's Life & Health Business Group said of the transaction: This represents a major milestone for Swiss Re as we extend our Admin ReSM offering to life insurers in Europe.
Zurich also sold Threadneedle Asset Management to American Express for £340m in June and sold its US subsidiary Zurich Scudder last year.
It also plans to close its banking arm, Zurich Invest Bank, by the end of 2003 despite last year’s massive advertising campaign promoting the bank.
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