Royal & SunAlliance (R&SA) is to sell its Isle of Man-based subsidiary to Friends Provident for £133m.
The sale of life assurance and investment arm R&SA International Financial Services includes R&SA Investment Management Luxembourg.
Both businesses are to be sold as going concerns.
The deal is the third in R&SA's stated disposal programme of non-core assets and takes its earnings from disposals to about £400m.
The group has said its needs £800m of additional capital to take advantage of the improving general insurance market.
It would also ease concerns voiced by the Financial Services Authority (FSA) and ratings agencies about its financial position.
Cheuvreux insurance analyst Barrie Cornes said R&SA had received a "reasonably good price" for the business and that the company should reach its £800m target by the year-end. However, he added that a rights issue was still a possibility.
"You certainly couldn't rule that out even if they did arrive at £800m. That's only a minimum that they need," he said.