How insurers deal with their legacy portfolios

Frankfurt, Munich The news came shortly before the turn of the year, and it caused a stir: The insurer Zurich is considering separating itself from a sub-portfolio of high-interest life insurance portfolios in this country, as Zurich Germany boss Carsten Schildknecht told the Handelsblatt at the time. Zurich is far from the only insurer looking for a solution for its legacy portfolios, after all, high-yield contracts from before the era of negative interest rates are weighing on the entire industry.

However, many providers are cautious when it comes to outsourcing life policies to specialized processing companies. The corporations are afraid of bad publicity, but economic hurdles also ensure restraint. That’s why more and more insurers are turning to alternatives: “The competition with external run-off is growing,” observes Hermann Weinmann, professor at the Ludwigshafen University of Applied Sciences.