Swiss Re Unit In Talks Over £1bn Stake Sale

One of Europe's biggest consolidators of closed-life insurance policies is approaching investors about the sale of a £1bn stake that could bolster its firepower for further acquisitions.

Sky News has learnt that Swiss Re (LSE: 0QL6.L - news) , a huge reinsurance group, has held initial talks with pension funds and sovereign wealth funds about a deal to bring one or more of them in as a substantial minority shareholder.

The process, which is being run by bankers at Credit Suisse (LSE: 0QP5.L - news) , is at an early stage, and may not result in formal discussions with potential investors until after the summer, according to City sources.

It was unclear on Thursday which overseas investors were being tapped up to acquire a stake in Admin Re, although

Swiss Re's search for a new investor in Admin Re comes amid an ongoing shake-up of the closed-life sector, which comprises insurance companies that no longer accept new business.

Last September, Admin Re bought Guardian Financial Services, a British competitor, for £1.6bn from Cinven, the private equity group.

A number of other deals are either in the works or have been announced in recent months.

In May, Phoenix bought AXA (Paris: FR0000120628 - news) 's pensions and protection business, while Deutsche Bank (LSE: 0H7D.L - news) is exploring a sale of its £3bn Abbey Life unit.

Admin Re could be among the parties interested in buying Abbey Life, which is among insurance companies being probed by the Financial Conduct Authority over their treatment of long-standing policy-holders.

Abbey Life includes books of business from companies including London and Edinburgh Life, Excess Life, Target Life and Hill Samuel Life.

A Swiss Re spokesman said it did not comment on speculation.