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Swire Pacific Limited

Press Release

17th January 1997


For immediate release
17th January 1997

Swire Pacific Rationalises Its Insurance Interests

Swire Pacific Ltd. today (17th January) announced plans to rationalise its local underwriting businesses.

Swire Pacific will sell its 49% stake in Taikoo Royal Insurance to the Royal SunAlliance Group which will merge Taikoo Royal with Sun Alliance Hong Kong Branch to form one of the largest non-life insurance operations in the territory.

Swire Insurance Holdings, comprising various agency operations and minority interests in Wing Hang Swire Insurance and Zurich Insurance Co. (Asia), will be sold to Zurich Insurance. Zurich Insurance will also acquire a majority interest in Paofoong Insurance from Swire Pacific. The balance of Swire Pacific's Paofoong shareholding will be sold to its existing joint venture partner, the Shanghai Commercial Bank. All these transactions are subject to approvals by the Hong Kong Insurance Authority and relevant boards.

Mr James Hughes-Hallett, Executive Director of Swire Pacific, said that this strategic decision was taken to improve Swire Pacific's focus of activity.

Mr Hughes-Hallett explained, "The Swire Group first went into underwriting to service the needs of its shipping and trading activities in the Far East in its early days. It was not intended as a major business of the Group, although it has grown into a sizeable operation in association with some of the most established and respected insurance companies in the market place, in particular Royal Insurance, Zurich Insurance, Sumitomo, Dowa and others. Nevertheless, the rapid growth of other businesses within the Swire Pacific group has meant that underwriting now represents an extremely small percentage of the group's turnover and operating profit.

"Over the years, the insurance industry has matured into a sophisticated and highly specialised business with some very dedicated players in the field. Whilst there were benefits of having our own underwriting companies to look after our insurance needs, a significant injection of new funds and management is required to remain at the forefront of the industry. Under these circumstances and in view of other priorities, it has been decided that the Group ceases to be actively involved in insurance underwriting, but will remain in the insurance broking business."

Mr Hughes-Hallett added that arrangements are in place to ensure that clients' interests will not be affected and that they will continue to receive the existing high level of service and expertise.

"Our insurance interests will be acquired by partners who are experts in the industry," he said. "We are very comfortable in the knowledge that staff in our underwriting operations will be transferring to such excellent companies as Royal SunAlliance and Zurich Insurance, with whom we, in any case, expect to have a long association as insurers in the future."





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