Swiss Re GB plc / Zurich Life Assurance

OFT closed case: Anticipated acquisition by Swiss Re GB plc of Zurich Life Assurance.

Affected market: Insurance and reinsurance

No. ME/1338/03

The OFT’s decision on reference under section 33 given on 17 October 2003


Swiss Re GB plc (Swiss Re GB) is active in the provision of all classes of reinsurance, insurance and the conduct of investment banking worldwide. It is wholly owned by Swiss Reinsurance Company Group (Swiss Re Group) one of the world 's largest life and health reinsurers. In the year to end December 2002, Swiss Re GB reported £1.04 billion of gross premiums written.
Zurich Life Assurance Company Ltd (Zurich Life) is active in the transaction of long term insurance business including life cover, permanent health insurance, critical illness protection and investment bond products exclusively in the UK. In the year to end December 2002, Zurich Life reported £75.4 million of gross premiums written.


Swiss Re GB plc has agreed to acquire 100 per cent of the issued share capital of Zurich Life Assurance Company Ltd from Zurich Financial Services for a consideration of £147 million subject to amendment based on the value of Zurich Life’s business and net assets in-force at the time of completion.

This transaction is in line with Swiss Re GB’s business strategy of acquiring books of life and health policies that have been, or will be placed into run-off and of assuming the responsibility of administering the underlying policies which it does via a third party. The transaction was notified as an informal submission on 22 August 2003. The administrative deadline for a decision is 23 October 2003.


As a result of this transaction Swiss Re GB and Zurich Life will cease to be distinct. The UK turnover of Zurich Life exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. A relevant merger situation is likely to be created.


Swiss Re GB is active in the provision of life re-insurance in the UK whereas Zurich Life is active in the provision of individual life cover, permanent health insurance, and critical illness protection insurance. 

Although insurance and reinsurance commonly comprise the transfer of risk they differ in respect of the nature of the risk transferred. A reinsurance contract transfers risk that has been assumed by an insurer under a pre-existing or contemplated insurance contract. A reinsurance contract is always entered into by insurers and reinsurers. On the other hand, an insurance contract transfers the original risk a consumer is exposed to, to an insurer. 
As a result there is no horizontal overlap between the parties' activities.


Swiss Re GB has a 30.2 per cent share of supply of reinsurance of UK life insurance. As indicated above, Zurich Life is not active in reinsurance but in the areas in which it is active in the UK, it has shares of supply of less than 1 per cent.

Since Zurich Life spreads the risk on its policies by reinsuring this risk, there are potential vertical links between the activities of Swiss Re GB and Zurich Life. However, given Zurich Life 's very small share of the various categories of life business it writes in the UK, and the fact that Swiss Re GB does not intend to seek any new business under the Zurich Life name, the transaction is unlikely to raise any competition concerns under this heading.


No third party contacted had any concerns in relation to this transaction.


There is no horizontal overlap between the parties' activities in the UK. Whilst there is a potential vertical link between the activities of Swiss Re GB and Zurich Life, Zurich Life 's shares of supply of the life business it writes in the UK are considered too small to raise any competition concerns.

The OFT does not believe that it is or may be the case that the creation of the relevant merger situation may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom for goods or services.


This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.

Published 16 October 2003