Insurer RSA faces takeover pressure
Major investors in troubled insurer RSA have called on the More Than owner to consider putting itself up for sale, it was reported today.
The pressure comes after boss Simon Lee quit the business following its third profits warning in six weeks and growing problems in its Irish division.
The Sunday Times said investors in the FTSE 100 insurer have written to the company to demand that it solicit takeover offers. Allianz, the giant German insurer, France's Axa and the Swiss heavyweight Zurich are all mooted to be interested in the 303-year-old business.
Several other investors have called for the company to sell its Canadian business or its fast-growing operations in Latin America, where it i s the biggest car insurer in countries such as Brazil and Chile.
RSA said on Friday that it will need to set aside another £130 million to pay out for personal injury claims in its Irish unit, on top of £70 million added previously.
With this month's storms in the UK and Scandinavia costing it another £25 million in claims, RSA warned of a further reduction in earnings for this year and an impact on next year's dividend payout for shareholders.
Reports have suggested that RSA will scrap its annual dividend to save £240 million as it looks to tackle a b lack hole estimated at more than £500 million.
Chairman Martin Scicluna, who has taken on Mr Lee's duties while a successor is found, has already announced a review of the group's businesses.
However, a top 20 investor told the Sunday Times that RSA should "categorically rule out a rights issue" and put itself up for sale.
He added: "Given recent events, the board should, as part of the review, solicit interest for the whole group from third parties."
Aviva, a rival FTSE 100 insurer, is also thought to be among the potential bidders.