NU Online News Service, June 15, 2:44 p.m.EDT

Zurich Financial Services Group says that one of its non-coresubsidiaries in the United Kingdom, Zurich Specialties London Ltd,will transfer its runoff insurance business to Swiss Re at bookvalue.

Zurich says the transaction is part of its strategy to divestmost of its non-core businesses in order to release and redeploy$1.5 billion of capital and focus on its chosen target markets.

The runoff business being transferred to Swiss Re ispredominantly comprised of U.S. and U.K. broker-placed commercialcasualty policies written on both a direct and assumed basis,Zurich says.

According to Zurich's first-quarter results report on May 5,some of its runoff, largely comprised of U.S. life insurance andannuity portfolios, reported decreased business operating profit of$36 million, primarily because of the positive market-drivenreserve development in the first three months of 2010, achievedbefore the implementation of the dynamic hedge in March 2010.

Zurich Specialties London Ltd. has not underwritten new policiessince 2005, the company says, noting that Zurich and Swiss Re havesigned a reinsurance agreement which transfers the benefits andrisks of this portfolio as of April 1, 2011 from Zurich to Swiss Reuntil the transfer is completed. Zurich will transfer about $950million in gross assets and liabilities to Swiss Re.

It is expected the transaction will allow repatriation over timeof regulatory capital from Zurich Specialties London Ltd. to itsparent of about $360 million, according to the company.

The completion of this transaction is subject to certainconditions including regulatory review and court approval. None ofZurich Specialties London Ltd.’s customers will be materiallyaffected by the transaction and their terms and conditions willcontinue to apply, Zurich says.