Update: Swiss Re Ends Five-Year Shareholding in China Re’s Investment Subsidiary

(Clarifies Peter Reichenbach's role at Swiss Re Asset Management (Asia).) Hong Kong-based Swiss Re Asset Management (Asia) Ltd. is no longer a shareholder of China Re Asset Management Co. Ltd., after it has been approved to transfer 20 million shares, or a 10% stake in the Chinese investment company to China Re (Group) Corp., according to the China Insurance Regulatory Commission.

Following completion of the equity transfer, China Re (Group) will hold 140 million shares, or a 70% stake in China Re Asset Management, said the CIRC in a statement.

"The exit is in line with China Re (Group)'s intention to consolidate its shareholding of subsidiaries and Swiss Re's global strategy to focus on its core reinsurance business," K.C. Wong, a Hong Kong-based spokesman at Swiss Re, told BestWire.

The spokesman declined to comment on the amount involved in portfolio divestments, but said Swiss Re "remains committed" to the China market, leveraging its global expertise to assist clients and other stakeholders in this market for sustainable growth of the insurance industry in China.

Swiss Re Asset Management (Asia), a wholly owned subsidiary of Swiss Re, was invited to be a founding shareholder of China Re Asset Management in 2004, mainly to provide knowledge transfer, technical support and consultancy to the Chinese investment company during its start-up stage, according to Swiss Re.

Peter Reichenbach is the principal officer at Swiss Re Asset Management (Asia).

The company subscribed to 20 million common shares, representing a 10% shareholding of China Re Asset Management at that time, Wong said.

China Re Asset Management has fully developed its asset management operations and capability with support from its shareholders over the years, said Wong, who added that Swiss Re Asset Management (Asia), China Re (Group) and China Re Asset Management all found it an "appropriate time" for the Swiss company to exit the Chinese asset management company and sell its shareholding to China Re (Group).

Beijing-based China Re Asset Management was established in February 2005. Its six founders included China Re (Group), China Property/Casualty Re, China Life Re, China Continent Property/Casualty, Swiss Re Asset Management (Asia) and Fuxi Investment. It was also the first Chinese insurance asset manager with a foreign shareholder.

The investment company, which has focused on managing the capital assets of China Re, aims at expanding to serve both life and nonlife insurance companies in China.

The CIRC granted China Re Asset Management a license in late September 2004 under the Provisional Regulations on the Administration of Insurance Asset Management Companies, which came into effect on June 1, 2004, according to Swiss Re.

China Re (Group) was established in Beijing by the Ministry of Finance of China and Central Huijin Investment Ltd., which is a wholly state-owned company authorized by the State Council of China. Those two shareholders respectively hold 14.5% and 85.5% of its shares.

China Re is the only Chinese reinsurance group in the country and has registered capital of 36.15 billion yuan (US$5.29 billion).

At year-end 2009, total assets in China's insurance industry were more than 4.06 trillion yuan, noted the CIRC.

(By David Pilla, international editor, BestWeek: [email protected])