insurer's risk

A Bold Gamble for Zurich Insurance

zurich insurance_bloomberg
Is it a sure thing?
  • Why it matters

    Why it matters

    With an offer valued at €7.7 billion, Zurich’s takeover of Britian’s RSA would mark one of the largest deals in the European insurance industry this year and give Zurich a stronger presence in the United Kingdom, Scandinavia and South America.

  • Facts


    • Zurich’s bid for RSA represents a 25-percent markup over the company’s share price four weeks ago.
    • Zurich would need to achieve synergies of at least £400 million to make the deal pay off financially.
    • The Swiss company’s last major takeover was of auto insurer 21st Century in 2009.
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Zurich Insurance Group has long been a quiet giant of the industry. Now it looks like the giant might be waking up.

Zurich, Switzerland’s largest insurer and in the world’s top 20, is making an aggressive play for Royal Sun Alliance, or RSA, Britain’s second-largest property insurer.

The potential €7.7 billion deal would be one of the largest in Europe in recent years and has some wondering whether a wave of consolidation might soon be in the cards for an insurance industry that has struggled to turn a consistent profit in the recent years of record low interest rates.

But Zurich’s new bravado is unlikely to provoke a reaction from Germany’s Allianz, Europe’s market leader, or other major rivals, analysts say.

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