Stephen Hester considering sale of RSA’s Latin America division

RSA is considering a sale of its Latin America business in what would be the largest disposal yet by the UK insurer's chief executive Stephen Hester as he undertakes a wide-ranging restructuring.

The company has instructed Goldman Sachs to handle a potential disposal of the division, which accounted for about a 10th of its premium income last year, people familiar with the matter said.

The potential sale comes as Mr Hester, hired a year ago to lead RSA’s efforts to recover from an accounting scandal at its Irish arm, battles weak premium income and a flagging share price. Annual results disappointed investors.

The Latin America business, estimated to be worth about £500 million (€701m), became a potential candidate for disposal in November 2013 after the insurer issued two profit warnings within four days.

Under Mr Hester the insurer has so far avoided a sale of the division. He has already sold a range of other RSA assets in the past year,worth about £800 million (€1.1bn).

With the insurer also considering a disposal of its smaller Middle East operation, the group would be left focused on the UK, Ireland, Canada and Scandinavia if it pressed ahead with a sale of the Latin America assets.

The assets would be likely to tempt several of the world’s top insurers, which have been expanding aggressively in the region.

RSA’s premium income from Latin America rose 4 per cent last year, compared with an 8 per cent decline across the group. – (Copyright The Financial Times Limited 2015)