RSA sells Canadian insurance broker as part of shake-up

20th May 2014 07:21

RSA is selling its majority-owned Canadian insurance broker Noraxis Capital Corporation for 500m Canadian dollars as part of the British insurer's turnaround drive.RSA is selling its stake in Noraxis, which was founded by RSA Canada in 1999 and supplies commercial, personal and employee benefit services, to international insurer Arthur J Gallagher & Co.The deal is expected to result in a gain on sale of about £140m and should add about £225m to the group's tangible net assets, improving its capital strength.It brings to about £540m announced sales since RSA unveiled its turnaround drive in February, including plans to raise up to £1.6bn through disposals, tapping shareholders and scrapping its dividend.The group has faced a tough time as weather-related claims and accounting irregularities at its Irish business hit profits.Chief Executive Stephen Hester, who launched the shake-up after joining RSA from Royal Bank of Scotland, said: "This disposal represents further progress against our aim of tightening the strategic focus of the group."Noraxis is a sizeable brokerage business and unique in that context within the group. RSA's core strength is in providing, as principal, the best personal and commercial insurance products to our customers, and that is where our focus will continue to be."PW