R&SA spin-off releases £540m in successful flotation
Royal & SunAlliance's (R&SA) former Australasian subsidiary Promina left analysts confounded after a striking debut on stock markets down under.
The spin off values the business at A$1.9bn (£750m) and releases £540m of risk based capital.
It generates £662m for R&SA including £137m in intragroup debt repayments.
Standard & Poor's said the capital release was broadly in line with expectations. It said R&SA's rating depended on the IPO's success.
Shares in the newly independent business defied critics' expectations by trading at up to A$2 on Monday.
They were issued at A$1.80 and were heavily over-subscribed.
The cash injection is central to the group's attempts to fill a £700m shortfall.
Analyst Chris Rathbone, of Williams de Broë, said: "It's obviously a step in the right direction."
"It gives it £540m of risk based capital, which is not to be sneezed at."
The boost comes after a High Court ruling last week that R&SA is liable for compensation claims from asbestos victims which could run into millions of pounds.
Mr Justice Lawrence Collins said the UK's second largest general insurer had an agreement with asbestos manufacturer Turner & Newall to pay compensation to workers suffering from abestos-related diseases. These workers were exposed to asbestos after 1969.
The group said that it was confident its reserves, which were doubled last year to £750m, would cover claims.
Rathbone said R&SA's asbestos problems were decreasing and forecast a net tangible asset value in the range £215m - £220m against a background of a continuing hard market, which could bode well for the group's recovery.
The group's shares lost 2% on Monday to trade at 112p.
