Zurich Financial Services has started talks with the UK financial watchdog as it looks to centralise its European life assurance operations outside the country.
Zurich is understood to be planning the creation of a single headquarters for the European arm of the operation in Dublin. Senior officials at the insurer have met with the Financial Services Authority to discuss how such a move would affect its £35bn life assurance business in the UK. The group said it "continues to explore ways to streamline its legal structure and optimise its capital efficiency", but added that "no decisions about how this will be achieved within our life businesses" had yet been taken.
The UK business would effectively become a branch of the central office in Dublin should the plan go ahead. It is understood that there would be little change to its operations in Swindon and Cheltenham, and it would still pay UK tax.
Zurich introduced a similar structure for its general insurance business in Europe in early 2009. One source said establishing the headquarters was part of a move to simplify the capital and legal structure. Ireland is also deemed attractive because of it's membership of the European Union and has a low rate of corporate taxation.
The group is looking at the structure in preparation for new regulation including Solvency II, which comes into force in two years. "Solvency II will fundamentally transform the capital adequacy and risk management regime for the European insurance industry," Ken Hogg, who works in the FSA's insurance sector, said.
Rival Aviva centralised part of its European business in Ireland in October.