From Trieste to China

As potential buyers of Royal Bank of Scotland’s insurance division (RBSI) began to declare their interest, the press spread its bets far and wide – from Trieste, to China, to Omaha.

While any institution with sufficiently deep pockets appears to be in the running for RBSI, reports suggested that the bank’s shareholders were far from pleased with the strategy to sell one of its most cash generative businesses.

Though analysts agree that a sale of assets is a necessary exercise in addition to its record breaking (and now-notorious) £12bn rights issue, it appears that the insurance division was on few shareholders’ must-sell lists.

On insurancetimes.co.uk, RBS-related content dominated the news, with visitors keen to read any discussion of the sale, potential buyers and likely outcomes.

While the RBSI story continues to play out, across the globe the saga of another blockbuster deal took another twist. Certainly, IAG’s issuing of its second profit warning of the year last week made sense of QBE’s somewhat mysterious two-week extension of its A$7.7bn offer for the personal lines giant.

In the wake of the news that IAG was reshaping its UK portfolio – which includes Equity, Hastings and Advantage – a note to clients from Merrill Lynch claimed the insurer should never have entered the market in the first place.

IAG’s under-fire chief executive Michael Hawker will not have found it easy reading. Merrill Lynch said in its note: “We continue to believe that there needs to be some accountability in IAG for the UK expansion.”

With IAG’s share price falling – and despite the defiance of IAG chairman, Andrew Strong, that the business would not be sold – the note added: “We find it hard to see how IAG will deliver value comparable to that on offer from QBE, so contend that IAG should engage QBE and try to generate better terms.”

Despite the intrigue, the most popular story however was the news that the private equity arm of Barclays had backed a management buy-out of Oxford-based broker A-Plan.

Revealed on insurancetimes.co.uk, the story saw more traffic than any other in the previous week, despite it being less than 48 hours old as Insurance Times went to press.

Other heavy hitters in the online news space last week included Marsh’s announcement that it could outsource more of its London staff, and Zurich’s expansion of its mergers and acquisitions operation in the UK.