Report: Allianz Working On Deal To Shed U.S. Life Insurance Block

Allianz SE is working on a deal to offload a large block of U.S. life insurance policies in a move that reportedly could be announced in the coming days.

A spokesman for Allianz Life Insurance Co. of North America said this morning that the company will decline comment.

Europe’s largest insurer is "discussing a potential reinsurance deal for a portfolio with tens of billions of dollars in assets and liabilities," Bloomberg reported Friday afternoon.

The potential sale appears connected to legal and regulatory difficulties Allianz is facing.

The insurer is a target of investigations by the U.S. Department of Justice. A Sept. 10 Reuters report indicated that the DOJ is looking at possible misconduct by fund managers and misrepresentation of risk to investors.

Allianz disclosed the DOJ probe on Aug. 1 and is inviting investors who may have been harmed to contact the insurer. Investigators are focused on Allianz funds that used complex options strategies to generate returns but racked up massive losses when the spread of COVID-19 triggered wild stock market swings in February and March 2020, Reuters reported.

"The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors," Allianz said in an investor alert issued this week.

The Securities and Exchange Commission launched a probe into the demise of the funds last year, the insurer announced. The Arkansas Teacher Retirement System filed a lawsuit in July 2020 seeking $774 million in damages.

Several other large U.S. public pension funds have since followed with lawsuits, including those for New York subway workers and city of Milwaukee employees. Allianz faces about 25 lawsuits seeking damages of about $6 billion, Reuters said.