World News – CA – Major UK insurer could sell to Canadian and Danish rivals in $ 9 billion deal – Business Insurance


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Risk management

Thomson reuters

(Reuters) – RSA Group PLC said it is in talks with a consortium of Canadian insurer Intact Financial Corp and Danish insurer Tryg A / S over a possible separation deal that values ​​the UK company at 7 £ 1 billion ($ 9 3 billion)

RSA has said its board would be prepared to recommend the proposed 685 pence in cash per RSA share, plus payment by RSA of its previously announced interim dividend of 8 pence per share

RSA said it received the proposal on October 2, which values ​​the home, auto and commercial insurer at a premium of 50% over its October 1 closing price

RSA shares climbed 46% to close at 670 pence on Thursday Jefferies analysts said the offer price was – more than fair valueâ € ”

Robey Warshaw, Goldman Sachs and Bank of America are working with RSA on deal, insurer said

Best known in Britain for its More Than brand, RSA also has large operations in Canada, Ireland and Scandinavia

Under the terms of the agreement, Intact will retain RSA’s operations in Canada and the UK & International, while Tryg will take control of RSA’s operations in Sweden and Norway Intact and Tryg are said to be co-owners of RSA’s Danish activities

RSA appointed Christian Baltzer, former CFO of Tryg, to head its Danish operations last year

Insurer has been open for bids since 2015 when a previous bidding approach by Zurich Insurance Group SA failed, industry sources say Intact and Tryg have both been offered as potential bidders for several years

Stephen Hester, Managing Director of RSA, former NatWest boss who joined RSA in 2014, has cut back on underperforming activities

Rising commercial insurance rates, lower claims unrelated to the pandemic and tightening of its underwriting strategy boosted RSA’s technical profit in the first nine months of 2020, despite the impact of the COVID-19, he said earlier

The combined RSA ratio stands at 90% in the third quarter, compared to 936% at the end of 2019

The insurer said it was revising down its initial estimate of the raw impact of a September judgment in a UK test case presented by the UK markets regulator around the payment of insurance against operating losses of around £ 20 million

RSA, Intact Financial Corporation, Tryg, Takeover, Finance, Underwriting profit

World news – CA – Big UK insurer could sell to Canadian and Danish rivals in deal a $ 9 billion transaction – Business Insurance


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