Zurich Financial Services will continue to hold a 20% stake in New China Life, costing the Swiss insurer up to $US420 million ($417 million).

New China Life is undertaking a capital raising and Zurich has agreed to take 280 million new shares priced at RMB10 ($1.48) per share.

Zurich bought a stake of New China Life in 2000. The investment was valued at $US131 million ($130.3 million) at the end of June this year.

CEO Martin Senn says the purchase of more shares in New China Life is a strategic move to maintaining a presence in China.

“Our decision to participate in New China Life’s share issue reflects our belief that China’s fast-growing insurance sector represents an attractive investment opportunity,” he said.

New China Life wrote gross premiums of $US9.6 billion ($9.4 billion) in 2009 and has a 9.3% share of the Chinese life insurance market, according to the China Insurance Regulatory Commission.

Meanwhile, Zurich Insurance has completed its purchase of an 80% stake in Mayapada Life. The Indonesia-based Mayapada Group will hold the remaining shares in the life insurer.