Zurich Insurance's £5.5 billion merger with RSA is OFF because of explosions in China
It has even cost the group its £5.5 billion ($8.5 billion) merger with RSA Insurance, with the Swiss company saying in a statement this morning (emphasis ours):
In light of the above recent deterioration in the trading performance in the Group's General Insurance business, Zurich announced this morning that it has terminated its discussions in connection with a possible offer for RSA. The Group's focus instead will be on taking the necessary actions to deliver on the required performance of the General Insurance business.
Zurich revealed in its preliminary third quarter update that its Zurich Insurance arm could be hit by further losses linked to the Chinese factory explosions because "the nature of many of the losses and the extended remediation period to complete repairs means that uncertainty as to the final cost remains."
It added that it will alert investors of the estimated net of reinsurance before tax on November 5, when it reports its final third quarter results.
In August this year, a warehouse containing large quantities of dangerous chemicals exploded in the port city of Tianjin. The Japanese meteorological agency said at the time that the explosions were so huge that they could be seen from space. It killed 50 people and injured 701. Fires continued to burn for nearly 24 hours after the explosion.
It was horrific: