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Zurich Insurance stated yesterday that it is considering an offer for RSA Insurance Group, the London-based multi-line insurer.   Today Zurich, based in Zurich, Switzerland, stated that any offer it might make for RSA would likely be made only in cash.

RSA stated in a statement yesterday that it had held neither talks nor gotten a proposal from Zurich, thus advising its shareholders to take no action. 

An analyst at Berenberg Bank, Sami Taipalus, said that an RSA acquisition “would not do anything to strengthen Zurich’s hand in the increasingly competitive U.S. and global commercial lines markets.”   But he said his bank thinks the potential acquisition is a good fit for Zurich.  “There is an overlap between the operations of the companies in the United Kingdom.” 

RSA has attractive assets to Zurich and to other potential corporate predators in spite of its issues such as occurred in January of 2014 when the RSA Insurance Ireland CEO, CFO, and Claims Director were suspended following an internal audit and subsequent investigation into “issues” identified.  As a result, RSA Insurance Group had to inject capital into RSA Insurance Ireland in order to insure its solvency. 

An unidentified broker source said that unlike some recent mergers and acquisitions, like ACE Ltd’s proposed acquision of Chubb Corp., that have strong strategic rationale,  a purchase of RSA by Zurich would be a strong company buying a weaker one.  But a deal in buying RSA would give Zurich additional strength in United Kingdom retail operations. 

lonce@adjustercom.com ; Lonce LaMon, journalist; all rights reserved

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