Insurer plans radical global restructure to raise cash

Royal & SunAlliance (R&SA) plans to radically refocus and restructure its global business, involving the UK, US, Latin America, Australia and Denmark, according to sources close to the company.

There is growing speculation that the insurer's proposed £1bn rights issue has now been scrapped. Instead R&SA has begun negotiating a raft of disposals with a number of investment banks.

This could include the sell-off of part of its US operation, estimated to raise £200m.

The sale of its Australian operations has also been mooted and, with the country's commercial lines sector predicted to remain hard for at least two years, analysts have put the value above £700m. R&SA's interest in Danish insurer Codan may also be "waning", said a source.

Speculation also surrounds the life businesses in Latin America, particularly Argentina, and Canada, which may be sold.

R&SA's Duncan Boyle is expected to outline its strategic and capital raising plans on Thursday when the insurer announces its third quarter results. The changes are expected to touch all areas of the business, offshore and in the UK.

An R&SA spokesman said: "Under stock exchange rules, we cannot comment. This is all speculation at the moment."

Last week R&SA made a formal statement that it will face further litigation on asbestos claims which will lead to large payments and bigger liabilities. Employees of the UK's largest asbestos manufacturer, Turner & Newall, who are suffering from asbestos-related diseases, are suing the insurer for compensation.

T&N claim R&SA was liable because it provided employers' liability (EL) policies for the firm.

The case is expected to focus on what policy exclusions were in force and to what extent these covered any or all asbestos-related cases.

R&SA said its contention is that "those asbestos cases were excluded".