Switzerland-based Zurich Financial Services has entered into an agreement to transfer part of its UK annuity business to reinsurance specialist Swiss Re. As a result, the business will be managed by Windsor Life Assurance Company, a Swiss Re subsidiary.

As part of the reinsurance agreement, Zurich will transfer approximately GBP3.7 billion in assets and approximately GBP3.9 billion in liabilities. Together with Swiss Re, Zurich will initiate the formal transfer in order to make Swiss Re the insurer under the annuities. Zurich’s annuity customers will continue as normal and their terms and conditions will continue to apply.

The annuity portfolio transferred covers approximately 220,000 policies. The transaction is expected to have a positive impact on the Zurich European embedded value and will be accretive on conclusion of the formal transfer.

Zurich has had a clear strategy to focus on its core business of pensions, investments and protection and has not actively marketed its UK annuity business since 2005. This transaction is in line with the group’s current strategy to release capital and cash to focus on enhancing its propositions in its chosen markets.

Paul van de Geijn, CEO of Zurich global life, said: Zurich reviews and adapts its product offerings constantly to serve its customers better and to remain competitive. This allows us to focus our resources on our core business where we are pursuing sustained profitable growth.

The transaction is subject to regulatory and court approvals.