Zurich decision triggered by deterioration in GI business as result of large losses and US motor woes
RSA’s share price fell 21.5% in trading this morning as Zurich revealed that it had terminated talks to buy the insurer as a result of a deterioration in Zurich’s general insurance business.
RSA’s share prices closed at 509.5p on Friday 18 September.
However, this morning its share price opened at 400p.
The insurer announced this morning it expected that weaker than expected profitability in its general insurance business in the first half of 2015 would continue into the third quarter, driven by large losses and negative impact from US motor liabilities.
And as a result it had terminated its discussions in connection with a possible offer for RSA.
Additionally, Zurich Group general insurance chief executive Kristof Terryn is also planning to conduct a review of the business.
In response to the termination talks, RSA said that Zurich confirmed to RSA that the due diligence findings were in line with their expectations and that it had not found anything that would have prevented it from proceeding with the transaction on the terms announced on 25 August 2015.