General Insurance Article - RSA to sell Italian business to ITAS Mutua

 RSA Insurance Group has announced that it has reached agreement to sell the entire business of the Italian branches of Royal & Sun Alliance Insurance and the Sun Insurance Office (together ‘RSA Italy’) to ITAS Mutua.

 RSA will pass on insurance liabilities of £434m with their associated assets and receive a further goodwill payment of £19m. The transaction is structured as the transfer of the entire business of each branch. RSA expects to recognise a gain on sale of £28m and an addition to the Group’s tangible net assets of approximately £8m. The positive impact of the transaction on RSA’s Group IGD surplus is approximately £50m.

 Completion is anticipated during the second half of 2015, subject to obtaining regulatory approval.

 Stephen Hester, RSA Group chief executive, comments

 “This transaction continues the excellent momentum of our announced disposals in 2014 and represents further progress in tightening the strategic focus of the Group.”

 RSA Italy underwrites both personal and commercial insurance risks and accounted for £221m of net written premiums and a £1m underwriting loss in RSA Group’s 2013 financial statements. At 31 December 2013, technical provisions were £434m.