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Zurich eyes Openwork stake sale

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Zurich is considering selling its 25 per cent stake in advice network Openwork, Money Marketing understands.

The insurer has appointed investment banking advisory firm Evercore to explore exit opportunities as senior management look to rid the company of any liability risk associated with the business.

Sources say the move has been sparked by a shift in strategic focus for Zurich following its decision to launch a multi-billion pound bid for general insurance giant RSA.

A source close to the situation says: “Zurich is exploring exit opportunities for the Openwork business. It is clear they don’t want the regulatory burden of owning an advice network.

“They are focusing on building up general insurance with the acquisition of RSA.

“Owning an advisory business is also open to regulatory scrutiny and that is something Zurich does not want to remain exposed to.

“Given Openwork’s recent results it is actually a good time to look for a new partner to propel the business forward. The growth in Omnis in particular has been very strong and profitability of the business as a whole is projected to increase over time.”

Zurich and Openwork declined to comment. Evercore could not be reached for comment.

Last year Openwork delivered operating profits of £5.5m, a 230 per cent increase on the 2013 figure of £1.7m. Omnis Investments, the fund range launched by Openwork in partnership with Octopus Investments in February last year, attracted nearly £1bn of new investments during 2014, taking total assets past the £2.5bn mark.

Last month, the network announced a “radical restructure” following an in-depth review which will see the business split into wealth, mortgage and protection divisions, each headed by a director.

In November last year Openwork took control of MetLife’s network of 930 protection advisers, taking the total number of advisers to around 3,000.

Openwork is 67.5 per cent owned by member firms and 7.5 per cent by an Openwork employees trust, with the remainder held by Zurich.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Two points-: who would want to buy it ? and secondly, and probably the most important, Zurich don’t want the regulatory “burden” !

    It tells us something, these days its not commercial problems, that are the main negative impact on financial services, but a regulatory one !

    No remind me again, what are the aims of the regulator ……….

  2. As a surveyor who has always worked at the bottom of the food chain, and has suffered in the past from criticism from regulators who cheerfully employ hindsight as a tool, it has always been on my to do list to turn the tables and need someone to point me in the direction of the documentary source of a regulators duties, powers and responsibilities.

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