The persistent low interest rate environment over the past few years has prompted changes in the life insurance industry. Against this backdrop, Allianz Suisse Lebensversicherungs-Gesellschaft AG and reinsurance company Resolution Re have agreed on an innovative reinsurance solution to hedge interest rate commitments.
Under the agreement, Resolution Re will take over the market and insurance risks of a legacy portfolio of individual life insurance products from Allianz Suisse, within the framework of quota share reinsurance. The products in the portfolio, which has a reserve volume of around CHF 4 billion, have been discontinued.
Both parties have agreed not to disclose the terms of the transaction, which complies with all the regulatory requirements.
The transaction will further strengthen the competitiveness and capital position of Allianz Suisse Lebensversicherung by improving its risk-return ratio in a sustainable manner.
Stefan Rapp, the CFO of Allianz Suisse, says: “With this innovative solution, we are aiming to not only further strengthen our already solid capital position but also to reduce volatility in our solvency ratio. We want to create scope for further growth and to ensure that our life business is ready for the future despite the major challenges.”