Zurich Insurance Group AG unit Zurich Insurance PLC agreed with Catalina Holdings (Bermuda) Ltd. and certain of its subsidiaries to transfer its pre-2007 U.K. legacy employers' liability policies to Catalina.

The portfolio had gross liabilities of $2 billion as of Dec. 31, 2017, primarily relating to industrial disease claims, including asbestos. The transaction will be carried out in two steps: a reinsurance agreement between Zurich Insurance PLC and Bermuda insurer Catalina General Insurance Ltd., followed by a transfer of the policies and liabilities to U.K. insurer Catalina London Ltd.

The deal is subject to regulatory and court approvals. The companies expect the final transfer to take place within two years.

Zurich expects a small negative effect on its fourth-quarter 2018 business operating profit from costs related to the transaction, and a small positive effect on its capital position in the first quarter of 2019. Zurich expects a positive contribution to business operating profit over the full period to completion of the transfer.