Zurich Insurance has abandoned its proposed £5.6bn bid for British insurer RSA Insurance after forecasting a $200m loss in its general insurance business in the third quarter, and announcing $275 million in losses from explosions at a container storage station in China.
Zurich said in a statement this morning that instead of buying RSA in a proposed transaction first announced in July, it will focussing on boosting performance of its general insurance business.
The insurer said extended remediation period at the explosion site in the port of Tianjin, China, to complete repairs means that "uncertainty as to the final cost remains." Zurich said recently completed reserve reviews indicate a likely negative impact of around $300 million in the third quarter.
RSA sells insurance in the Irish consumer market as 123.ie.
Zurich also said its expects weaker-than-expected profitability in the general insurance business in the first half of 2015 will continue into the third quarter.
The insurer said it remains committed to achieving its financial targets for 2014 to 2016 of an after-tax return on equity from operating profit of between 12 percent and 14 percent.