Swiss Life is close to completing the sale of its UK business to the global reinsurer, Swiss Re.
The group, which was forced to raise 1.2 billion Swiss francs (£543m) in a rights issue last year, put its UK insurance arm up for sale in September. The business may be worth up to £200m. "We will be prepared to say something on the sale of the UK business within weeks," announced a spokesman for Swiss Life.
The company, which has been in the UK since 1967, has its UK headquarters in Sevenoaks, Kent, and employs 700 people around the country. It specialises in niche life insurance products, such as critical illness cover and income protection, and had revenues of Sfr666m in 2002.
A unit of Swiss Re, called Admin Re, is understood to be very close to finalising the deal to take the UK business off Swiss Life's hands. The unit buys insurance funds that are closed to new business, and also provides reinsurance to blocks of business that a group is keen to dispose of. It makes money through stripping costs and administering policies more efficiently.
Admin Re has, as yet, only completed transactions in the US, but has been scouting round the UK for opportunities to expand. It is not yet known what will happen to the Swiss Life business and its employees if the deal is completed. The majority of its employees are based in Liverpool, the company's policy administration centre.
There are a number of life insurance businesses on the block in the UK, including AMP-owned NPI, Britannic, and Royal & Sun Alliance, all of which could be of interest to Admin Re. But it is thought that Swiss Life's business has proved the most attractive as it is free from the mis-selling risks that plague life and pension companies and has operated in a similar market to Swiss Re.
Swiss Life is withdrawing from the UK to conserve capital on its ailing balance sheet. It is Switzerland's largest life and pension insurer and has spent about £2bn on takeovers since 1996. It is also seeking to cut back its operations in Italy, Spain, France and Belgium.
The group has been wracked with problems in the past year, and posted a record loss of Sfr1.7bn for 2002 after two accounting errors forced it to restate results.
The board was also hit by a scandal involving a number of former directors who have since come under investigation for their role in an investment fund, set up by the group, that earned them huge personal profits.
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