Zurich drops RSA bid

Zurich Insurance Group has announced that it has decided against making the expected bid for RSA Insurance Group, as it decides instead to focus on profitability.

The deal would have combined two of Europe and the world’s largest primary insurance groups, resulting in an almost certain reduction in reinsurance bought by a combined entity.

Zurich has announced that an immediate focus on profitability and that after a deterioration in trading performance the insurer would not look to make the acquisition offer anymore.

Zurich said that discussions with RSA have been terminated and that it “does not intend to make an offer to acquire the entire issued and to be issued ordinary share capital of RSA.”

In a second announcement Zurich explains that this is because of a “recent deterioration in the trading performance in the Group’s General Insurance business.”

Meaning that Zurich’s “focus instead will be on taking the necessary actions to deliver on the required performance of the General Insurance business.”

Further to this, Zurich also explains that; “Recently completed reserve reviews indicate a likely negative impact of around USD 300 million in the third quarter in relation to current and prior year liabilities for U.S. auto liability and certain other lines of business.”