London-based RSA Insurance Group, the 300-year-old insurer (previously Royal and Sun Alliance) that owns the More Than insurance brand, has accepted a £7.2-billion takeover offer from two insurers – the Canada-based Intact Financial Corporation and Scandinavian insurer Tryg.
RSA’s Swedish and Norwegian businesses will be absorbed by Tryg, which will pay £4.2 billion for the privilege; and Intact will take over RSA’s Canadian, UK and Ireland, and international operations, paying the remaining £3 billion to do so. Both companies will co-own RSA’s Danish business, and a total of £82 million in dividends will be paid out to RSA shareholders.
Uninterrupted dedication to serving customers
“RSA has provided peace of mind to individuals and protected businesses from risk for more than 300 years. However, I am confident that the values of our business, and not least our dedication to serving customers well, will be sustained as part of Intact and Tryg,” said Martin Scicluna, Chairman of RSA.
RSA CEO Stephen Hester notes that the deal is only expected to cause a ‘small number of job losses’ in the UK – mostly at the company’s headquarters.
What are the wider implications of this of this billion-pound deal? That one of the UK’s oldest insurers is due to split in two may not be a great omen for the insurance industry, but as Hester reasoned, a takeover was ‘not a situation that the company had sought’; the insurer was only ‘willing to give up its independence’ for a ‘truly premium value’.
Still, it seems that we are seeing more takeovers this year, since the global pandemic has caused insurance companies, as well as other lines of business, to struggle financially.