Resolution Life, a long-term legacy life insurance solutions provider, has announced that its Bermudian reinsurance platform, Resolution Re, has entered into a reinsurance agreement with Allianz Suisse Lebensversicherungs-Gesellschaft AG (Allianz Suisse).
The deal transfers a quota share of 80% of the liabilities of Allianz Suisse’s Traditional Individual Life Business, made up of endowment and annuity policies relating to coverage for market risks and insurance risks.
The reinsured business is a closed-book of policies which are in run-off, with no new business and comprises CHF 4.0 billion (USD 4.3 billion) in total liabilities.
Under the terms of the deal, which has been approved by the Swiss Financial Market Supervisory Authority (FINMA), Allianz Suisse will continue to service the reinsured business, while Resolution Re and Allianz Suisse will work in partnership to manage the reinsured policies.
“We are delighted to have signed this reinsurance agreement with Allianz Suisse, the largest Europeanto-Bermuda life legacy portfolio reinsurance transaction to date and a great example of our holistic approach to managing biometric and asset risks that demonstrates the strength of Resolution Re’s global reinsurance offering,” said Resolution Re CEO Steve Hales
Chercher Yang, Resolution Life Group Head of M&A, also commented: “This transaction was a real partnership between Resolution Life and the Allianz Group teams, working together during a difficult period of lockdown to achieve the inaugural Swiss to Bermuda direct reinsurance agreement. We believe this is a great example of Resolution Life’s continuing commitment to provide de-risking solutions to primary life insurers globally.”
Remo Cavegn, Chief Risk Officer of Allianz Suisse, added: “This transaction with Resolution Re benefits Allianz Suisse, the Allianz Group and the policyholders we serve by allowing us to de-risk the balance sheet while ensuring we continue to provide our customers with safe, long-term financial stability for the duration of their policies. We believe Resolution Re to be the right partner for Allianz Suisse to jointly protect our customers’ interests.”
Credit Suisse International acted as financial advisor for this transaction, while Herbert Smith Freehills LLP’s London office and Lenz & Staehelin’s Zurich office acted as legal advisors to Resolution Re and Ernst & Young Switzerland advised on Swiss tax aspects.
KPMG Zurich advised Allianz Suisse on the transaction and Baer & Karrer, Zurich acted as legal advisors to Allianz Suisse.
