11 Assets held for sale

In the fourth quarter of 2019, the Group entered into an agreement to sell its subsidiary ReAssure Group plc (ReAssure), currently within the Life Capital business segment, to Phoenix Group Holdings plc (Phoenix). The transaction is expected to close in mid-2020, subject to approvals by regulators and anti-trust authorities.

Swiss Re will receive a cash payment of USD 1.6 billion, shares in Phoenix representing a 13% to 17% stake and be entitled to a seat on its Board of Directors. ReAssure’s minority shareholder, MS&AD Insurance Group Holdings Inc, will receive shares in Phoenix representing an 11% to 15% stake. An expected future loss of USD 230 million on the disposal of the net assets was recognised in the fourth quarter 2019.

The principal products administered by ReAssure are long-term life and pension products, permanent health insurance, critical illness products and retirement annuities. The Group reassessed goodwill based on the agreement to sell ReAssure to Phoenix. USD 139 million of the estimated loss has been allocated against the goodwill held by ReAssure, reducing its carrying amount to zero. For the remainder of USD 91 million an additional liability has been established within ”Liabilities held for sale”. The loss has been reflected in the “Net realised investment gains/losses“ line in the income statement. This loss will be adjusted based on the ultimate purchase price to be determined as of the closing of the transaction.

For the year ended 31 December 2018 and 2019, ReAssure reported a pre-tax income of USD 272 million and USD 120 million, of which USD 231 million and USD 32 million were attributable to the Swiss Re Group respectively.

The major classes of assets and liabilities held for sale are listed below.