Zurich may have been first to arrive at RSA’s door, but according to many analysts, it probably will not be the last.
Analysts at Shore Capital believe that an acquisition is “inevitable,” and feel that if Zurich submits an official bid, other rivals will emerge to do the same.
“We retain our 'buy' recommendation on RSA and await the possibility of a counter-bid from another continental European insurer,” Eamonn Flanagan, one of the UK’s top ten insurance and finance stockbroking analysts, told
Proactive Investors.
New solvency regulations in Europe that take effect in January are encouraging insurers to consolidate as a way to raise capital. RSA’s thriving Canadian operations make the UK insurer particularly attractive to outsiders, as does its UK and Scandinavian outfits.
AJ Bell, a prominent provider of online investment products and services in Britain, also contends that a formal offer, following on the heels of the conditional bid Zurich has already proffered, would prompt others to follow suit.
“If Zurich decides to go ahead with a move for RSA, it is unlikely this will be the last,” said investment research director Russ Mould. Similarly, Panmure Gordon argued that RSA will not operate as an independent company for much longer.
Industry insiders have pointed to Germany’s
Allianz and Italy’s
Generali as potential rival bidders, although
Aviva and
AIG have been named in the rumor mill as well.
While Jonathan Swift at the UK’s
Post and
Insurance Age acknowledges that Allianz is a probable suitor for RSA since their business imperatives align closely, he argues that RSA may be irresistible “catnip” for Zurich following its aborted 2008 bid for Direct Line Group.
