Zurich announces reduced stake in NCI

by Richard Kilner

Story link: Zurich announces reduced stake in NCI

Zurich Financial Services Group has announced that it has reduced its stake in New China Life Insurance from 20% to 15%.

The 5% was sold to undisclosed buyers, with the sale price moderately exceeding the respective book value at year-end, and Zurich is to retain its 15% stake in New China Life Insurance (NCI).

NCI’s gross written premiums last year totalled US$13.8bn, and from 2005 to 2010 it averaged an annual premium growth rate of 40%.

NCI has an 8.9% stake in the Chinese life insurance market, and Zurich first invested in the firm over 10 years ago.

Zurich Chief Executive Officer Martin Senn explained that the 5% sale decision was made as the firm sought to manage its exposure to a business which it does not control.

Senn added that Zurich retained the 15% stake as it maintained confidence in the prospects of NCI and the Chinese life insurance market more generally.

In November last year Zurich made a US$420m investment in NCI to retain its stake at 20%.

The deal, which requires regulatory approval, is expected to be concluded during the second quarter of the year.