Insurer Swiss Life is to integrate the bulk of its domestic La Suisse unit into its main operations, cutting 200 jobs from the payroll over the next two years.This content was published on February 1, 2005 - 12:08
The decision marks the end of a household name in Switzerland and a change of strategy for the group.
Swiss Life had stated previously that it wanted to sell the business to slash operating costs.
The insurer's plans to absorb La Suisse’s life-insurance portfolios, which account for around 70 per cent of the unit’s revenues, into its main business, sell off its non-life operations and buy life-insurance books in return.
“We are significantly strengthening our position in our domestic market,” said Swiss Life chief executive Rolf Dörig in a statement on Tuesday.
The decision marks the end of a household name in Switzerland that has been around since 1858.
Zurich-based Swiss Life will take a SFr80 million ($67.45 million) restructuring charge in its 2005 financial year because of the reorganisation.
It said it expected annual cost savings of SFr70 million francs from 2007.
“It seems like a sensible transaction,” said Tim Dawson, an insurance analyst at the Helvea brokerage firm.
“They are getting out of non-life, which is what they wanted to do, and they’ll have a stronger position in group life.”
Switzerland’s biggest life insurer said it would sell La Suisse’s property and liability lines to Swiss insurer Vaudoise, buying Vaudoise’s group life business in return.
La Suisse’s disability and accident operations are to go to health insurer Helsana. Swiss Life disclosed no financial details for any of these deals.
Swiss Life is recovering from two loss-making years in 2001 and 2002, and has stated repeatedly that it wanted to shed La Suisse, which earned a meagre SFr7.5 million in net profit on premium revenues of SFr1.137 billion in 2003.
Analysts had warned recently that it might have a hard time finding a buyer.
“The fact they could not find a buyer shows the business is not very profitable,” said René Locher of Kepler Equities.
Swiss Life said 100 of the 900 jobs at La Suisse, based in French-speaking Switzerland, would be cut this year and an additional 100 positions would go in 2006 and 2007.
A further 270 employees are set to leave La Suisse following the sale of activities to Vaudoise and Helsana, ultimately reducing the number of staff working on La Suisse lines to 430.
All the deals are subject to regulatory approval.
swissinfo with agencies
The La Suisse insurance company was founded 1858.
It became part of the Swiss Life group in 1988.
La Suisse has 900 employees.
Swiss Life was founded as Rentenanstalt (Swiss Life Insurance and Pension Company) in 1857.
The group employs over 10,000 people, and has assets worth over SFr162 billion.
In 2003, it made a profit of SFr233 million.
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