Zurich Insurance is considering a bid for rival RSA, which is run by former Royal Bank of Scotland boss Stephen Hester, as the insurance sector looks set for a major shake-up.
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Insurers across Europe are preparing themselves for the Solvency II rules that come into force in January and require firms to hold certain levels of capital to protect themselves against market shocks.
Zurich Insurance Group has confirmed that it is “evaluating a potential offer for RSA Insurance Group”.
Zurich is considering a takeover bid for RSA, the British insurer that is several years into a turnaround plan after a series of profit warnings.
At the time of writing, RSA had not issued a statement commenting on Zurich’s confirmation.
Shares in RSA were up 12.4 percent at 490 pence at 0708 GMT.
RSA had a market valued of £4.45 billion ($6.9 billion) before…
In other top gainers, GKN added more than 6 percent after the British engineering company said it had agreed to acquire Netherlands-based Fokker Technologies for 706 million euros ($781 million), including debt, to strengthen its position as a supplier to aeroplane manufacturers. “However, a bid for the whole group is much more likely and today sees the first indication that such a bid may be on the cards”, Shore Capital analyst Eamonn Flanagan said in a note.
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A tie-up between Zurich and RSA would follow the $28 billion deal between Swiss insurance giant ACE and upmarket property insurer Chubb Corp.
