Zurich Continues to Progress on its Strategy to Exit Non-Core Businesses
The Eagle Star Insurance Group transfers its general insurance portfolio to RiverStone
The Eagle Star Insurance Group (Eagle Star), which is wholly owned by Zurich and based in the UK, has agreed to transfer its remaining general insurance business to RiverStone Insurance (UK) Limited (RiverStone). Zurich and RiverStone have signed a reinsurance agreement which transfers the benefits and risks of Eagle Star's general insurance portfolio as at July 1, 2012 from Zurich to RiverStone until completion of the full transfer. As a result, USD 273 million in undiscounted gross liabilities will transfer to RiverStone, predominantly U.S. asbestos, pollution and health risks written from the mid-1940s to the mid-1980s. The transaction will generate a pre-tax profit in 2012 and is expected to release USD 340 million of local capital within two years. Eagle Star has been in run off since 2006, and this transaction is part of Zurich's wider strategy to divest most of its non-core businesses to release and redeploy USD 1.5 billion of capital by 2015. The completion of this transaction will be subject to regulatory review and court approval. Customers will not be materially affected, and the terms and conditions of their policies will continue to apply. Zurich will notify all affected policyholders as part of the formal transfer process.
Zurich Bank's banking license returned
Furthermore and unrelated to the above, on December 14, 2012, The Central Bank of Ireland approved Zurich Bank's request to cancel its banking license. As a result, Zurich Bank has now been renamed Dunbar Assets Ireland. This is another significant step in the controlled exit of Zurich from its banking business. It follows the successful transfer of Dunbar Bank plc's remaining bank accounts and the return of its UK banking license last year.
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