Zurich and Axa sell old portfolios to life insurance companies

Frankfurt, Munich After years of standstill, the processing of old life insurance portfolios in Germany is starting to move again. According to three people familiar with the matter, insurers Zurich and Axa are looking for ways to divest themselves of old portfolios with high interest obligations.

This would allow them to streamline their balance sheets and reduce the complexity of their operations. They also want to focus more attention on growth areas such as new products in old-age provision.

Potential buyers are specialized firms that acquire bundles of policies and settle them over the years. Since insurers no longer write new life business in this area, the number of policies falls over time, while the fixed costs for processing them change only slightly. Run-off companies can leverage economies of scale by managing portfolios from multiple insurers via their platform.