Zurich Insurance faces hit over Tianjin disaster, scraps RSA takeover bid

“In light of the above recent deterioration in the trading performance in the group’s general insurance business, Zurich announced this morning that it has terminated its discussions in connection with a possible offer for RSA“, the company said in a statement.

Zurich previously said that RSA has “many strengths” which would complement its business.

Investor Cevian Capital, RSA’s top shareholder, was not immediately available for comment.

Zurich Insurance announced that the company now estimates aggregate losses of approximately $275 million related to the series of explosions at a container storage station in the Port of Tianjin in China in mid-August 2015.

Insurance group Zurich has pulled out of its proposed takeover of Liverpool rival RSA. Zurich will focus on improving its general insurance business.

Zurich did not expand on its announcement on Monday that talks had been terminated.

As a result, the firm’s general insurance chief executive Kristof Terryn is conducting “an in-depth review of the business”, Zurich said.

RSA said trading results for July and August had been positive and ahead of its expectations.

“Additionally, we have announced the sale of our Latin America business, the principal outstanding piece of our strategic refocus programme”.

Former RSA boss Richard Gamble had said the deal could have revitalised the British giant, writing to the Telegraph to say he would “welcome a bid to put me out of my agony of watching the company of which I was so proud disintegrate in the way it has over the last 17 years”.

A stock exchange statement this morning (21 September) revealed expectation of weaker than expected profitability in the general insurance division during the first half of 2015, which it set to continue in the third quarter.