Update: Zurich Insurance Weighs Sale of Hong Kong & Singapore Units

By and Pamela Barbaglia | February 24, 2016

Zurich Insurance is exploring a sale of its Hong Kong and Singapore operations as it reviews its non-core businesses outside Europe, sources familiar with the matter said.

The Swiss insurer has discussed the plan with several investment banks but has yet to hire advisers, the sources said, cautioning that no deal was certain.

[Editor’s note: Zurich subsequently issued a statement regarding reports that it is exploring a sale of its Hong Kong and Singapore operations. “…We would like to clarify that Zurich has no intention of exiting the Hong Kong or Singapore markets,” the company said. “We remain committed to our General Insurance and Global Life businesses in Hong Kong, and our General Insurance business in Singapore. Zurich retains its position as top two general insurer in Hong Kong, and one of the top five general insurers in Singapore. We look forward to continuing to service and protect our customers from risk in these key strategic markets for Zurich in Asia Pacific.”]

The Swiss insurer launched an in-depth review of its business in September after explosions at the Chinese port of Tianjin caused losses of around $275 million.

It had also abandoned a 5.6 billion pound bid for Britain’s RSA Insurance after a “deterioration” in its general insurance business.

Then in January it issued a profit warning for its general insurance business and subsequently hired Generali’s former Chief Mario Greco to revive its fortunes.

The firm’s Asian review comes amid efforts to sell Zurich’s businesses in South Africa and Morocco, the sources said, adding that Morgan Stanley is leading the South African sale, which Zurich announced on Feb.19.

Zurich began scaling back its Asian franchise last year when it stopped accepting new life policy applications in Singapore, where it has been since 2006.

Asian Franchise

A partial exit from Asia will need the blessing of Zurich’s incoming boss Greco.

The 56-year-old executive will take over the reins in March from Tom de Swaan, who has held the role on an interim basis since Martin Senn stepped down in December.

“It’s up to Greco to take the final decision on Asia,” one of the sources said.

If a sale goes ahead, Zurich will focus on China, Indonesia, Japan, Malaysia, Australia, New Zealand and Taiwan, the sources said.

Zurich restructured its Australia business last year, pulling out of some products, changing its organizational structure and cutting jobs.

(Additional reporting by Swati Pandey in Sydney and Joshua Franklin in Zurich; editing by Rachel Armstrong and Alexander Smith)

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