Sun Alliance is selling Sun Alliance Insurance Company (Canada), which had premium income in 1992 of Cdollars 126m (pounds 63m) and net assets of Cdollars 71m, to Royal Insurance.
As Royal had net written premium income in 1992 of Cdollars 775m, the combined companies will have an annual premium income of Cdollars 900m and assets exceeding Cdollars 2bn. The transaction relates only to Sun's fire and casualty business.
Royal Insurance Canada has a 5.3 per cent share in the Canadian property-casualty market, compared with Sun's 1 per cent. Richard Gamble, group chief executive of Royal Insurance, said the acquisition reinforced Royal's goal of remaining a leading player in Canada.
Sun Alliance's New Zealand subsidiary, Sun Alliance Insurance Limited, is acquiring Royal Insurance NZ Ltd, with assets in 1992 of NZdollars 8m (pounds 3m). The purchase will produce an enlarged Sun Alliance with general business annual premiums in excess of NZdollars 160m (pounds 58m).
Roger Neville, Sun's chief executive, said: 'The purchase confirms Sun Alliance's position as the third largest general insurance company in New Zealand.'
Both transactions are effective on 1 January, 1994, pending regulatory approval. Sun Alliance's shares closed 2p higher at 382p, and Royal's 1p up at 326p.
Kevin Phillips, of Kleinwort Benson, said the deal appeared to be driven by both companies tidying up international operations, but should hardly affect solvency.Reuse content