Zurich Financial Services has agreed to transfer the run-off business of its Zurich Specialties London to Swiss Re, as part of its strategy to divest its non-core businesses to release and redeploy $1.5bn of capital to chosen markets.

Zurich will transfer approximately $950m in gross assets and liabilities to Swiss Re.

The Zurich Specialties business is mainly comprised of US and UK broker placed commercial casualty policies written on both a direct and assumed basis. Since 2005, the business has not underwritten any new policies.

Zurich Financial expects the transaction will allow repatriation over time of regulatory capital from UK subsidiary, Zurich Specialties London, to its parent of approximately $360m.

Zurich and Swiss Re have signed a reinsurance agreement that transfers the benefits and risks of the portfolio effective April 1 to Swiss Re until the transaction is complete.

Zurich said the customers will not be materially affected by the transaction and the terms and conditions of their policies will continue to apply.

The completion of this transaction is subject to certain conditions including regulatory review and court approval.