Zurich has announced it is exploring the possibility of selling its closed book of annuity business.
The company says the development is part of its ongoing efforts to “create business value” and says it is looking into selling this sector of the company because “annuities are not core business and the book is closed”.
Although no details have been released on any possible buyers or whether any offers have yet been made, the bulk annuity market has seen a number of new entrants over the past few months, which provides a number of possible contenders.
In addition to Prudential and Legal & General, who have operated in the bulk annuity market for a while, insurers Aegon and AIG have both recently decided to venture into the buy-out arena.
While a number of new companies set up specifically for the bulk annuity market have been established by ex-Prudential staff, with Paternoster led by Mark Wood an ex-Prudential chief executive, while Isabel Hudson, Jay Shah and Mark Duffy have set up Synesis Life.
And in addition Jonathan Bloomer, another ex-chief executive at Prudential, is in the process of setting up yet another new entrant to the market called Lucida, backed by the investment firm Cerberus.
However, Zurich stresses it is still just “exploring the possibility” of selling the annuity business at the moment and warns it is “too early for us to go into further detail at this stage”.
A spokesman adds: “We would like to reassure customers that they will not be materially affected by any potential transaction and current terms and conditions will continue to apply. Zurich is committed to ensuring that the transaction, if effected, is not to the detriment of the customer.”
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