RSA sells Canadian broker Noraxis to Gallagher for £273m

RSA has sold its majority stake in Canadian broker Noraxis Capital to Arthur J Gallagher for C$500m (£273m).

The sale is expected to net RSA a £140m profit and add £225m to the its tangible net assets.

RSA announced in February that it would look to sell parts of its business deemed non-core as part of a plan to shore up its capital base, and it April it sold its Baltic and Polish operations to Polish insurer BZU for £300m.

RSA group chief executive Stephen Hester said: “This disposal represents further progress against our aim of tightening the strategic focus of the group, and brings to around £540m the announced sales since our new strategy and action plan was unveiled in February.

“Noraxis is a sizable brokerage business and unique in that context within the group. RSA’s core strength is in providing, as principal, the best personal and commercial insurance products to our customers, and that is where our focus will continue to be as we deliver on our new strategy and action plan.”

The insurer said it would continue to evaluate further non-core disposals, some of which are expected to be agreed to this year.

On completion, Gallagher will hold about 87% of Noraxis. The remaining 13% will continue to be owned by various members of Noraxis’s management. The deal is subject to regulatory approval and is expected to close in July 2014.

Gallagher said owning Noraxis would give it the opportunity to establish new underwriting capabilities in Canada.

RSA UK and Western Europe chief executive Adrian Brown will join the broker as executive chairman of underwriting and distribution later this year, a role that includes developing Gallagher’s managing general agent business outside the UK.

Gallagher international chief executive David Ross said: “In Noraxis, we have found our ideal Canadian partner and together we now have a solid platform for organic growth and a leadership team that will continue to attract new merger partners.”

“By joining with Gallagher, Noraxis will be able to leverage our sales and service capabilities across Canada.”