17th Oct 2014 10:47
LONDON (Alliance News) - RSA Insurance Group PLC Friday said it has agreed to sell Italian business RSA Italy to ITAS Mutua, and expects to book a GBP28 million gain on the sale, as Chief Executive Stephen Hester continues to implement his turnaround plan for the FTSE 100 insurer.
RSA said it has agreed to sell the entire business of the Italian branches of Royal & Sun Alliance Insurance PLC and the Sun Insurance Office Ltd, which together make up RSA Italy.
In a statement, RSA said it will pass on insurance liabilities of GBP434 million with their associated assets and receive a further goodwill payment of GBP19 million. The transaction is structured as the transfer of the entire business of each branch.
The group expects to recognise a GBP28 million gain on the sale and an increase in its tangible net assets of about GBP8 million. It also said the sale will boost its Insurance Groups Directive surplus, a measure of regulatory capital, by about GBP50 million.
RSA expects the deal to complete in the second half of 2015, subject to regulatory approval.
"This transaction continues the excellent momentum of our announced disposals in 2014 and represents further progress in tightening the strategic focus of the group," Hester said in a statement.
Hester has overseen a string of asset sales since joining RSA in February. The former Royal Bank of Scotland Group boss was recruited after RSA suffered an accounting scandal in its Ireland operations and rising claims that together prompted and a number of profit warnings.
RSA Italy underwrites both personal and commercial insurance risks. It accounted for GBP221 million of net written premiums and a GBP1 million underwriting loss in RSA's last financial year.
Lazard advised RSA on the sale.
RSA shares were Friday quoted down 0.2% at 447.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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