ZURICH—Zurich Financial Services Group said Wednesday that it will transfer the runoff book of business of U.K. subsidiary Zurich Specialties London Ltd. to Swiss Reinsurance Co. as part of a plan to divest noncore business and redeploy $1.5 billion in capital.

The unit, which has not written any new business since 2005, predominantly underwrote U.S. and U.K. broker-placed commercial casualty business, Zurich said in a statement.

Policyholders will not be materially affected by the transaction, Zurich said, and the terms and conditions of their policies will continue to apply.

As part of the deal, Swiss Re will buy the runoff business of Zurich Specialties London at book value.

Zurich will transfer about $950 million in gross assets and liabilities to Swiss Re, and Zurich said it expects the transaction to enable it, over time, to repatriate $360 million of regulatory capital from Zurich Specialties London back to the parent company.

Zurich and Swiss Re have signed a reinsurance agreement that transfers the benefits and risks of the portfolio effective April 1 to Swiss Re until the transaction is complete.

Completion of the deal is subject to regulatory and court approvals, Zurich said.