The deal involves property and casualty insurer Zetta Insurance, which has more than 120 points of sales in Russia, with over 9,500 agents in more than 150 cities in the country, and has over a million customers.

Upon completion, Allianz said it will hold a minority stake of 49.9% in the combined company. The sale is subject to regulatory approvals.

Allianz estimates the deal to have a negative impact of about €400m (£341m, $428m) on its profit and loss account, “largely due to the reclassification of negative foreign exchange impact from shareholders’ equity”.

It added that the sale “is aimed at ensuring continuity for clients and employees”, after its decision to scale back operations in Russia following the invasion of Ukraine.

Prior to this deal, Allianz has been steadily expanding its global presence with a €207m acquisition in Greece in February 2022, and with the creation of a pan-African joint venture with Sanlam in May 2022.

Under its new owners, the business will operate independently under a different brand, while Zurich will no longer conduct business operations in Russia.

The transaction will allow the company to retain a team to continue serving the Russian market.

Zurich Russia is a property and casualty insurer with about 0.3% of the Russian non-life insurance market.

Its main business has been supporting the activities in Russia of Zurich’s international customers. In 2021, Zurich Russia had gross written premiums of approximately $34m (£27m, €32m), including $3m from domestic customers.

The deal is subject to approval of the relevant regulatory authorities.

Logo issue

The sale comes several months after Zurich removed its “Z” logo from all social media platforms to support Ukraine in its fight against Russia’s invasion.

The firm removed the logo – a white Z on a blue background – as it did not want its meaning to be misconstrued.

The letter Z has been used as a mark on Russian military vehicles in Ukraine to symbolise support for the war.

But there seems to be a staggering difference on the value of assets frozen by the two Bailiwicks.

As of 30 April 2022, firms in Jersey had frozen more than £1bn ($1.3bn, €1.2bn) worth of assets, while just under £5m in Guernsey, as of 12 May 2022.

It is not clear whether the two Channel Islands have a different sanctions regime, or if one has more Russian assets than the other.

The government on Guernsey’s policy and resource committee said: “The assets held within Bailiwick bank accounts on behalf of a sanctioned person that have been frozen as part of the response to Russia’s invasion of Ukraine amount to less than £5m.

“Since introducing these sanctions, the policy and resources committee has received and continues to receive a wide range of responses from the private sector, covering a range of issues with some relating to assets within the Bailiwick and others being general queries where the sanctions regime was not ultimately engaged.

“The notifications received show a desire from the private sector in the Bailiwick to do the right thing and to not only comply with the regime, but to go beyond, seeking to avoid the risk of exposure to any sanctions issue.”

The firm said it was removing the logo – a white Z on a blue background – as it did not want its meaning to be misconstrued.

The letter Z has been used as a mark on Russian military vehicles in Ukraine to symbolise support for the war.

A spokesperson for the insurer told International Adviser: “The Zurich brand has been around for 150 years. It is a trusted brand and we have proven our ability to change and respond to challenges over time.

“We are temporarily removing the use of the letter ‘Z’ from social channels where it appears in isolation and could be misinterpreted.”

The move follows Zurich’s announcement earlier in March that it was no longer accepting new domestic customers in Russia, and it did not intend to renew existing local business.

Russia launched a wide-scale attack on Ukraine on 24 February 2022, and despite political measures like financial sanctions, the war has failed to de-escalate.

Unfortunately, this gives investors the urge to alter their portfolios rather than stick with their long-term investment game plan.

Bevan Blair, chief investment officer at One Four Nine Portfolio Management, told International Adviser: “Advisers should be telling their clients stick with their current plans. They have been set up for the long term to meet their clients’ needs and to alter these in the face of the unpredictable is not serving their clients in their best interests.

“When volatility is high and the market is febrile, it is only luck and not skill that will determine the short-term performance if you are minded to try and time the market. Stay invested and look through to the long term, especially if you believe in a long-term.

“The message I have given to our financial advisers is to do nothing and ride out the short-term noise. At the moment, the uncertainty of the conflict, where it takes us and what the consequences are too high to play with clients hard earned wealth.

“Stay the course with the current plan and when we get more clarity or markets calm down assess how the objectives of that plan have changed, if at all.”

Multi-asset portfolios

Unfortunately, the investment world has not had just the impact of war to deal with, as rising inflation is also continuing to rear its ugly head.

In the UK, inflation rose by 6.2% in the 12 months to February 2022.

So, are multi-asset portfolios structured well enough to tackle the issues around the conflict and rising inflation?

Bevan added: “Multi-asset funds are structured as well as they can be for unknown quantities like conflicts around the world. A war in Europe is frankly something no money manager would have been prepared for and an escalation in the conflict would place all markets under incredible stress, especially from a diversification stand point.

“Some markets may be favoured in the short term, including gold, commodities, sovereign debt. But they have to function normally to be of value.

“If things deteriorated there is no guarantee that these markets would function normally. You just have to look at what is happening on the London Metal Exchange with nickel to see that.”