Following a trend amongst
foreign insurers to reduce exposure in China, Swiss insurer Zurich
Financial Services (ZFS) has sold a 5% stake in New China Life
(NCL) to an undisclosed buyer.
The move reduces ZFS’ stake
in NCL from 20% to 15%.
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While a selling price was not
disclosed, ZFS provided an indication that it was for more than
$250m.
Specifically, ZFS noted that
its 20% stake in NCI was valued at $1bn at the end of 2010 and that
the selling price of the 5% stake was “slightly above” book
value.
“Our decision to sell 5%
points of our stake in NCI reflects a desire to manage our
financial exposure to a business we do not control while retaining
our belief that China’s fast-growing insurance sector represents a
highly attractive investment opportunity for Zurich,” said ZFS CEO
Martin Senn.
ZFS’ initial stake in NCL,
acquired in 2000, was valued at $131m on 30 June 2010. In October
2010, ZFI announced its commitment to purchase new NCI shares for
about $420m.
According to the China Insurance Regulatory Commission,
NCI recorded gross written premiums of $13.8bn in 2010 and had a
market share of 8.9%.
