Swiss Life sells UK firm for £205m

Michael Clarke|This Is Money13 April 2012

SWISS Life has finally sold its UK life insurance business to Resolution Life Group for £205m. The sale, which has been on the cards since September 2002, is one of the last major steps of the company's restructuring programme. The group had stopped writing new insurance policies in the UK after closing its doors to new individual business in summer 2003. Swiss Life Group chief executive Rolf Dorig said: 'The transaction will further reduce complexity in our group and represents a clean exit from the UK, where we are eliminating the operational risk and providing security for our shareholders.' There will be a one-time charge of around £56.5m against 2004 earnings, the company said. 'The price is OK. The £56.5m is definitely a pity, but overall, the price is good. Looking at the market, it's fair,' said Stefan Schuermann, insurance analyst at Pictet.Sources said last month that investment group Resolution Life and British insurer Britannic were among the bidders which had placed final offers for Swiss Life's closed UK life insurance book. Closed insurance books consist of policies that are no longer sold but for which a life insurer still receives premiums. They can be profitable when effectively managed.Resolution was formed earlier this year by Standard Life, Prudential and other financial institutions to to buy life insurance businesses which have closed to new business. It is also buying Royal & Sun Alliance's life arm for ?850m. Swiss Life, like many other insurers, has spent much of the past three years returning its focus to its core insurance business in key markets after an unsuccessful expansion into a broad array of financial services contributed to big losses.It has also said it might give an update early next year on the disposal of its La Suisse insurance unit, which it has also put up for sale. It has indicated a Swiss buyer is not likely.The transaction depends on the approval of the Financial Services Authority, but should be completed by the end of the first quarter next year.