Allianz is reportedly in discussions with Resolution Life regarding a potential transfer of a block of Swiss life insurance assets, in a move that could free up regulatory capital for the ongoing investigation into its asset management arm.
Sources at Bloomberg say Allianz and Resolution have been working with advisors on a deal that could be announced as early as this week, pending regulatory approval.
The transaction would affect roughly $6 billion in liabilities that would be ceded to Resolution Life, Bloomberg reports.
The US Securities and Exchange Commission (SEC) launched an investigation into the Structured Alpha Funds of Allianz Global Investors in 2020 after pension funds said Allianz had failed to safeguard their investments throughout the financial volatility caused by the pandemic.
The Department of Justice (DOJ) has now also begun its own investigation, with Allianz having received requests from both government bodies for documents and information relating to the Funds.
Analysts believe Allianz could be facing a loss of between €3.5 billion and €6.8 billion as a result of the investigation, and the insurer has already acknowledged that the probe could “materially impact future financial results” of the group.
If the rumoured transaction with Resolution does go ahead, it would likely resemble a swap agreement, Bloomberg sources believe, where Allianz would remain legally responsible for the policies it transfers, but Resolution would manage the book going forward.