The Zurich Financial Services Group announced that it has it reduced its 20 percent stake in New China Life Insurance Co., Ltd. to 15 percent. Zurich said it has “agreed to sell 5 percent to undisclosed buyers.”
The sale is subject to the approval of the relevant regulatory authorities, and is expected to close in the second quarter of 2011.
Zurich noted that its “20 percent stake in NCI had been revalued up by approximately $1 billion as of December 31, 2010. The sale price for the 5 percent stake in NCI is slightly above the respective book value at year-end. Following the sale, Zurich will retain a 15 percent ownership stake in NCI.
“With gross written premiums of USD 13.8 billion in 2010 and a compound annual US$ premium growth rate of 40 percent from 2005 to 2010, NCI had an 8.9 percent share of the Chinese life insurance market as of December 2010, as reported by the China Insurance Regulatory Commission (CIRC).”
Martin Senn, Zurich’s CEO, explained: “Our decision to sell 5 percent 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.
“The Chinese government has expressed a clear intent to further develop the country’s insurance market and NCI is well-positioned in the life market. In addition to our investment in NCI, we continue to focus on building our own insurance business in this important growth market.”
Source: Zurich Financial Services Group
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