By Lyle Adriano
RSA Insurance Group announced December 9 that it was selling its Russian operations, Intouch Insurance, for about £5 million to Russian pension fund Blagosostoyanie.
The sale is a part of Chief Executive Stephen Hester’s efforts to eliminate the firm’s non-core assets worldwide and bolster its balance sheet.
Earlier in September, RSA sold its Latin American business to the tune of £400 million. The firm is anticipated to also sell off its Middle Eastern business.
Another peculiar reason for the sale of RSA’s Russian business was revealed in a statement made by group chief operating officer Paul Whittaker.
"Our business in Russia does not have the same scale as our core franchises in the UK, Canada and Scandinavia.”
Whittaker added that Intouch was sold to a company RSA believes is an “experienced and committed player in the Russian market.”
Blagosostoyanie is counted as one of Russia’s largest non-state pension funds, according to information on the company’s website.
RSA pointed out that its Russian arm was responsible for net premiums worth £27 million and an underwriting loss of £5 million within the firm’s 2014 group results, before deduction of non-controlling interest.
Hester stated that RSA is not expecting to be taken over by
Zurich Insurance, after the rival firm had abandoned a previously proposed £5.6 billion bid for RSA in September.
