Analyst says Zurich bid for RSA has a number of advantages 

Stephen Hester (large)

Zurich could make ‘pretty material cost savings’ if it acquires RSA, a leading analyst said today.

Shore Capital analyst Eamonn Flanagan said that ’the UK would offer Zurich the opportunity for some pretty material cost savings.’

Flanagan said that RSA had some ‘terrific assets’ for Zurich to plunder. Flanagan was speaking after it emerged today that Zurich is considering a reported £5.5bn bid.

He said: “We have not been keen on the break-up story on RSA due to the pension scheme deficit (whereby the trustees may want some of the proceeds if the covenant of the sponsor is weakened).

”However, a bid for the whole group is much more likely and today sees the first indication that such a bid may be on the cards.

”Our view has been that despite the group’s recent woes, such as in Ireland, there are some terrific assets in RSA that are attractive to corporate predators, such as in Canada and Scandinavia.”