SWISS LIFE, the Zurich-based insurer, yesterday announced it is to abandon the UK after failing to sell its insurance business.

The group said that its UK arm would stop accepting new business, although it would honour contracts. The UK business, which specialises in policies covering risks such as illness and unemployment, has failed to find a buyer willing to pay the £230 million asking price. The unit was put up for sale last September.

The closure of the fund will mean the loss of 200 jobs, primarily in Liverpool and Sevenoaks. The redundancies follow fellow insurer Norwich Union’s decision earlier this week to shed 900 staff in a cost-cutting move.

A Swiss Life spokesman said: “We didn’t want a firesale because we think there is value in this business.” Swiss Life had received some offers, but none matched the asking price. The spokesman added the group had decided the UK business was too capital intensive. “Our focus is on getting back to profitability and we didn’t want management attention focused on the UK issues.”

One part of Swiss Life UK will remain open, the group sales business. But Swiss Life said that unless a buyer for that part of the organisation was found by August, it would also shut to new UK business.

Swiss Life, like its peers, has suffered from stock market falls and declining capital. The group issued a shock profits warning in March, and announced a restructuring programme and a cull of its board.

The group reported an £800 million loss for 2002, wiping out the benefits of its emergency £700 million rights issue last December.

The group’s decision to pull out of the UK follows a similar decision by Australian insurer AMP earlier this year.