Royal & SunAlliance, the embattled insurer, yesterday showed signs of revival, announcing a deal to sell its offshore life insurance business to rival Friends Provident for £133m.
The company is trying to raise £800m through disposals to fund the expansion of its general insurance arm and to reduce the importance of life insurance to the group.
The disposals strategy has provoked scepticism among investors, who doubted that RSA would be able to raise the sum because it is contending with a number of problems across the group.
These include massive impending asbestosis claims and a severe lack of capital on the life side, which forced it to close its two with-profits funds at the end of last year. Its shares have slumped 44 per cent in the past 12 months. Yesterday they dipped 1p to 266.5p.
But the insurer has managed £450m of disposals, including yesterday's. Friends Ivory & Sime, owned by Friends Provident, also bought its asset management business for £240m and RSA sold its Benelux business for £77m in April.
RSA is now thought to have increased the target of money it wants to raise from disposals to £1bn, some of which will plug a gap created by continued falling equity markets.
It is confident that it can secure further deals to do this. Roman Cizdyn, an analyst at Commerzbank, said: "They said in February that the remaining deals were in the pipeline. I asked them this again and they confirmed that they are in the pipeline."
The latest disposal business dampened recent speculation that RSA will resort to a rights issue to raise the capital it needs to expand general insurance and to underwrite its life business, a significant proportion of which is now in run-off.
Bob Mendelsohn, RSA's chief executive, yesterday said he would explore every option before resorting to raising money through a rights issue.
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