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UPDATE 1-British insurer RSA to sell Asia unit in up to $500 mln deal -sources

Tue 17th June, 2014 4:19am
* Asia contributed less than 2pct of RSA's Q1 net earned 
    * Exit part of global restructuring, RSA announced sale of 
Baltics, Poland 
    * RSA shares are up 19.3 pct this year, in-line with broader 
 (Adds details on RSA operations, other global insurers exiting 
    By Denny Thomas 
    HONG KONG, June 17 (Reuters) - RSA Insurance Group Ltd 
 RSA.L , Britain's largest non-life insurer, is looking to sell 
its Asian operations in an auction that could fetch up to $500 
million and draw a wide range of suitors, people familiar with 
the sale process told Reuters. 
    The sale is part of a group-wide restructuring led by new 
Chief Executive Stephen Hester, after losses caused by extreme 
weather and accounting irregularities at its Irish division hit 
its finances and prompted the departure of several senior 
    Insurers considering bids include Sompo Japan Insurance, a 
unit of NKSJ Holdings Inc  8630.T  as well as France's AXA 
 AXAF.PA , the people said. Australia's QBE Insurance Group Ltd 
 QBE.AX  and German insurer Allianz SE  ALVG.DE  are also 
weighing their options, they added. 
    RSA, which is being advised by Goldman Sachs Group  GS.N ,   
is expected to kick off the sale process in the coming weeks, 
one of the people said. 
    RSA declined to comment, as did AXA, Allianz, QBE and Sompo 
Japan. AXA said it takes an extremely disciplined approach to 
examining acquisition opportunities but did not specifically 
reference RSA. 
    Goldman Sachs also declined to comment. 
    Best known in Britain for its More Than home and motor 
insurance brand, RSA joins a long list of global insurers to 
retreat or scale back Asian operations. Aviva  AV.L , ING Groep 
 ING.AS , American International Group  AIG.N  and New York Life 
are among prominent insurers that have cut down their Asia 
exposure since the global financial crisis. 
    At the same, some well-capitalised Asian companies, 
including AIA Group Ltd  1299.HK  and Canadian insurers Manulife 
Financial Corp  MFC.TO  and Sun Life Financial Inc  SLF.TO  have 
snapped up businesses sold by the retreating insurers. 
    In Asia, RSA has businesses in Hong Kong, Singapore, China 
and India but those operations contributed less than 2 percent 
to net premiums in the first quarter of 2014. That has  
encouraged the company to focus on core markets, such as the  
United Kingdom, Ireland and Scandinavia. 
    Net earned premiums from Asia fell 7 percent in the first 
quarter of 2014 to 38 million pounds ($64 million). RSA had  
total net earned premiums of 1.9 billion pounds, according to 
company filings. 
    As part of its turnaround, RSA is seeking to raise $2.7 
billion in capital, about half of which will come from the sale 
of non-core operations and money saved from scrapping its 
dividend, with the rest coming from a rights issue that wrapped 
up in April. 
    Asset sales so far include the sale of its Baltics and 
Poland units. 
    RSA shares have risen 19.3 percent year to date, broadly 
in-line with the performance of FTSE 100 Index  .FTSE . 
    ($1 = 0.5956 British Pounds) 
 (Reporting by Denny Thomas; Additional reporting by Taiga 
Uranaka in Tokyo, Byron Kaye in Sydney and Christopher Vellacott 
in London; Editing by Edwina Gibbs) 
 ((denny.thomas@thomsonreuters.com)(+852 2843 6358)(Reuters 
Messaging: denny.thomas.thomsonreuters.com@reuters.net)) 
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