Zurich Financial does not plan to cut its 15 percent equity stake in China's third-largest life insurer, the Swiss insurer's chief executive said on Monday.
The Chinese company, New China Life, is applying for a dual listing in Hong Kong and Shanghai, a move that could raise up to $4 billion, sources told Reuters earlier this month.
Zurich, Europe's fourth-biggest insurer, sold a quarter of its stake in the company to Nomura earlier this year for about $441 million.
We have no plans to dispose the 15 percent (equity stake in New China Life), CEO Martin Senn said at a media briefing in Beijing.
Like other global insurers, Zurich faces damage to its investment portfolio from this month's market downturn, but has reported strong profits for the second quarter, largely because of premium growth in Asia and Latin America.
As a foreign company, Zurich can only operate in China's insurance market with a local partner, giving it a strong incentive to retain at least part of its stake in New China Life.
Zurich Financial will continue to support New China Life as a shareholder and to share expertise with its Chinese partner whenever possible, said Senn.
LIMITED IMPACT FROM EUROZONE CRISIS
Senn predicted that Europe's debt crisis would not spin out of control and said that Zurich would come safely through any market turbulence.
Our base case is clearly there is no contagion in Europe. In other words, what we have seen in Greece would not spill over to other economies...i.e., Spain, Portugal or Italy, Senn said.
He added that his company has a strong capital position and the diversified investment portfolio needed to cope with volatile markets.
In particular, he said Zurich Financial is allocating assets in a way to match its liabilities, rather than running after the markets.
Senn said he is pleased with Zurich's investment returns so far. The company has earned an overall 1.7 percent return in the first six months of this year compared with 3.6 percent in the same period last year, according to the company's financial statements.
I am not losing my sleep over the portfolio, Senn said.