Zurich Insurance says it is not exiting Singapore, HK markets

SWISS-BASED insurer Zurich Insurance has dismissed reports that it is exploring an exit from the Hong Kong and Singapore markets.

In a statement issued on Thursday, the insurer clarified that it has no intention of exiting the Hong Kong or Singapore markets.

The clarification follows an initial report by Reuters on Feb 24, 2016, and "subsequent market rumours" that the group is exploring a sale of its Hong Kong and Singapore operations as it reviews its non-core businesses outside Europe.

"We remain committed to our general insurance and global life businesses in Hong Kong, and our general insurance business in Singapore. Zurich retains its position as top two general insurer in Hong Kong, and one of the top five general insurers in Singapore. We look forward to continuing to service and protect our customers from risk in these key strategic markets for Zurich in Asia-Pacific," the group said.

In response to queries from The Business Times, Stuart A Spencer, Zurich general insurance CEO for Asia-Pacific, said the company actively reviews strategy at regular intervals to ensure it continues to deliver on stakeholders' expectations.

The insurer has come under tremendous pressure in recent times.

On Feb 11, the group decided against returning capital to shareholders after setbacks in its general insurance division contributed to a bigger than expected net loss of US$424 million in the fourth quarter of 2015.

For the full year, net income dropped from US$3.95 billion in 2014 to US$1.84 billion in 2015, while business operating profits fell from US$4.64 billion to US$2.92 billion.

In December, Zurich announced its exit from the increasingly competitive life insurance market in Singapore as part of global strategy to exit underperforming portfolios in the face of growing cost pressures.

Zurich has been reviewing its business as it aims to deliver annual run-rate cost savings of US$300 million by the end of 2016, and of more than US$1 billion by the end of 2018.