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| UK Businesses For SaleRBS may sell its insurance underwriting arm later this year
19/03/2008
Royal Bank of Scotland (RBS) may sell NIG, its commercial insurance underwriting division, later this year once its cost-cutting restructuring has finished.
Discussions with potential buyers were suspended in January as the bids were too low. Since then RBS have started a round of cost-cutting at NIG in order to increase its value. It is believed that Merrill Lynch is acting as an adviser for RBS, as it has done on previous deals. Potential buyers for the insurance division include AIG, Groupama and MMA. A banker commented that RBS would be more likely to sell NIG's medium-to-large commercial book, which accounted for around a third of its total premium, estimated to be £1bn. The banker added, it is difficult to be profitable using brokers to sell commercial insurance for small and medium enterprise businesses. In January, the bank said that it would make 100 insurance division managers redundant after a review of its senior management structure. |
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