Zurich Insurance to provide debt finance, boost own property holdings

Zurich Insurance Group, Switzerland’s largest insurer, is getting into the market for European direct lending to commercial real estate projects, including infrastructure lending, as low interest rates bite into the company’s earnings from fixed-income investments.

Zurich’s CIO Cecilia Reyes said the insurer would initially invest “hundreds of millions” of euros, starting from early next year, in a manner similar to Germany’s largest public pension fund the BVK Bayerische Versorgungskammer which also lends to commercial real estate projects. Zurich’s new direct corporate lending will be focused mainly on Germany and euro-denominated private debt in other European countries, said Reyes. The insurer also wants to increase its directly-held real estate holdings which currently make up about 5.5% or $12bn of its assets.