Zurich eyes RSA bid

Zurich Insurance is weighing a bid for RSA, which could top USD8 billion, as insurers look to diversify amid tighter regulations and toughening market conditions.

Zurich's recent statement that it was considering a bid drove the largest one-day gain for 23 years in the British insurer's shares, which closed up 18 percent at 490 pence.

"Zurich notes the recent market speculation in relation to RSA Insurance Group Plc and confirms that the company is evaluating a potential offer," the statement said, adding there was no assurance any offer will be made.

The Financial Times said Zurich was considering a bid valuing RSA at GBP5.5 billion. Barclays analysts said Zurich had around USD3 billion in surplus cash and could take on debt of up to USD5 billion.

"RSA has many strengths that would complement our business," a Zurich spokesman said. "RSA is very clearly strong in Britain but also in Scandinavia and Canada. And they have business in Latin America, a market which we want to expand."