Swiss Life withdraws from China
The insurer Swiss Life has pulled the plug on its planned expansion in China, preferring to concentrate on its core European markets.
The company said on Friday it had already closed its representative office in Guangzhou and was in the process of closing another in Beijing. A spokeswoman added the insurer did not have a licence to sell life insurance in China.
Swiss Life decided to pull out of the Chinese market earlier this year. Last month, it announced it was cutting 800 jobs worldwide as part of a recovery plan.
The company ran into trouble after an expansion drive cut into profits. The bottom line was also hit when management failed to rein in costs.
“They have problems they have to solve in other areas,” said Eric Güller, an analyst for the Zurich cantonal bank. “China would just be a growth market, and they have concentrate on their core business.”
Mainland China is seen as a massive potential market for insurers, who should find it gradually easier to sell their products now that Beijing has joined the World Trade Organisation. Last year, the insurance market was worth $19.5 billion (SFr31 billion) in premiums and grew 40 per cent.
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