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Swiss Re sells remaining stake in New China Life: reports

28th May 2021 - Author: Matt Sheehan

Reports today from media company Caixin suggest that Swiss Re may have sold its remaining stake in Beijing-based life insurer New China Life Insurance Co.

Swiss ReSwiss Re bought 152.9 million shares in New China Life in 2013, but then sold almost half of these a few years ago in a deal worth about HK $3.55 billion (US $455 million).

But now, records on the Hong Kong stock exchange say Swiss Re has sold its remaining 77.9 million New China Life shares at a price of HK $29.2 each, raising a total of HK $2.3 billion (US $300 million).

While this sale was clearly less profitable than the earlier deal, the investment will likely be viewed as positive for Swiss Re overall, given that the reinsurer originally paid US $493 million for its stake.

Adding the two sales together, Swiss Re generated $755 million for its New China Life shares, leaving it up $262 million up on its original investment.

RMS

At its height, Swiss Re’s interest of 152.9 million shares represented a 4.9% stake in New China Life, having acquired the shares from Zurich Insurance Company Ltd in a 2013 deal for HK $3.82 billion (US $493 million).

At the time, New China Life was considered to be the third largest life insurer in China based on gross premium, with a focus on life and health products.

According to Caixin’s reports, Swiss Re did not issue any statement to provide an explanation for the sale of its remaining stake in New China Life.

However, the reinsurer could simply be freeing up cash after a challenging year in 2020, when it ultimately reported a net loss of US $878 million due to $3.9 billion of COVID-19 claims and reserves.

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