Zurich Insurance has said it is considering a bid for RSA Insurance, the owner of the More Than brand.
The Swiss firm said: “Zurich notes the recent market speculation in relation to RSA Insurance Group and confirms that the company is evaluating a potential offer.”
There is “no assurance that any offer will be made”, Zurich added.
RSA, which is run by former Royal Bank of Scotland boss Stephen Hester, has a market value of about £4.5bn.
Zurich is Europe’s third-largest insurer and has often been linked with a bid for RSA.
The move comes amid consolidation in the insurance sector ahead of new European rules about the reserves insurers must hold. The change has prompted some companies to merge in an attempt to diversify revenue streams.
The most recent deal was the $28bn (£18bn) tie-up by Swiss insurer ACE with US property insurer Chubb.
Shares in RSA were up more than 14% by midday to 501p following Zurich’s announcement, making it the top riser on the FTSE 100. Zurich Insurance shares slipped 1%.
Kamran Hossain, an analyst with RBC Capital Markets, said: “RSA has strong market positions in Scandinavia, in Canada, a large UK commercial franchise and operations in Latin America.
“Of particular interest to bidders would be the Scandinavian business in our view. Scandinavian insurance markets have oligopolistic characteristics, with few market players and strong profitability with low levels of competitions.”
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