"Zurich declines to comment on any speculation," spokeswoman Iris Roth said. No one from Royal & Sun Alliance was available for comment on reports that it had retained Goldman Sachs, the investment bank, to help prepare a defence. Shares in Royal & Sun have slumped 20 per cent this year as higher weather claims undermined profits. They hit a three-and-a-half- year low of 356p two weeks ago, before rising on merger speculation.
ZURICH FINANCIAL, the European insurance giant, was tight-lipped yesterday about rumours it was lining up a hostile pounds 7bn bid for Royal & Sun Alliance, the UK's third largest insurer.