Royal & SunAlliance (R&SA) took a long-awaited step towards its target of selling off £800m worth of non-core businesses.

It is transferring its asset management arm to Friends Ivory & Sime (FIS) for £240m.

The price was higher than expected by analysts, but will give R&SA badly needed funds to support its book of large commercial risks.

FIS will manage R&SA's general and life insurance funds, currently totalling about £30bn, for 10 years.

The deal increases its assets under management from £34bn to £70bn.

Analyst Roger Hill of UBS Warburg said: "The price was more than we had in our valuations, so in that sense we see it as better for R&SA than we thought.

"It's taken so long to take this first step, we're grateful to see something."

Attention will now focus on how much progress

R&SA has made on its other disposals.

Chief executive Bob Mendelsohn said in February that of seven disposal projects, five had received bids.