Swiss Life quits British market
Swiss Life has sold its British life insurance business to the Resolution Life Group for £205 million (SFr453.6 million).
The exit from the British market is being seen as one of the last major steps in Swiss Life’s ongoing restructuring programme.
Switzerland’s largest life insurer said there would be a one-off charge of around SFr120 million against its 2004 earnings.
But it added that the sale would free up SFr400 million in loans deployed in its British operations.
“The SFr120 million [charge] is definitely a pity, but overall the price is good,” commented insurance analyst Stefan Schürmann at the private bank, Pictet.
The Zurich-based company said in September 2002 that it would sell both its group and individual British life operations and stop writing new business from Britain.
“The transaction will further reduce complexity in our group and represents a clean exit from the United Kingdom,” commented Swiss Life chief executive Rolf Dörig in a statement on Thursday.
Restructuring
Since taking over as CEO in 2002, Dörig has sold businesses in Spain, Britain and Switzerland, cutting more than 1,500 jobs and reversing an expansion into asset management under former CEO Manfred Zobl.
Swiss Life gave its shares a much-needed boost last week, saying it was on course for better returns as its restructuring programme took hold.
It added that premium income had risen by five per cent in the first ten months of the year.
Since that announcement, the share price has risen by 9.4 per cent to reach SFr167.10 at Wednesday’s close of trading at the stock exchange.
But it has still underperformed the Dow Jones Stoxx European insurance-sector index by about 20 per cent this year amid fears about the heavy regulation in its home business and lingering memories of a series of capital increases.
Like many insurance companies, Swiss Life has spent much of the past three years concentrating on its core business, after an unsuccessful expansion into a range of financial services had contributed to big losses.
Swiss Life has said it might give news early next year on the sale of its insurance unit La Suisse, but it has indicated that a Swiss buyer is unlikely.
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Swiss Life Holding, registered in Zurich, was founded in 1857 as the Swiss Life Insurance and Pension Company.
It employs about 10,000 people worldwide.
The company had a net profit of SFr233 million in 2003.
The Resolution Life Group was formed earlier this year to buy and run closed British life funds.
Swiss Life has taken another step to return to core business with the sale of its insurance operations in Britain.
The sale price is £205 million (SFr453.6 million), but there is a one-off charge of about SFr120 million against 2004 earnings.
CEO Rolf Dörig has said the sale will reduce “complexity” in the group.
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