Insurance giant Royal & Sun Alliance said yesterday it would buy the loss adjusting arm of insolvent British commercial insurer Independent Insurance Group for around £3 million sterling (€5 million).

The deal, agreed with liquidators PricewaterhouseCoopers, will allow Royal & Sun to take control of the operation's 300 claims adjusters with immediate effect.

PricewaterhouseCooper partner, Mr Mark Batten, said the deal meant fair value had been achieved for the business and would avoid major staff redundancies.

It also meant there would be no break in the claims handling process for policyholders.

Royal & Sun had already begun recruiting some of Independent's employees and has taken on more than 250,000 of its household insurance policies.

Independent Insurance last month closed to new business and called in the liquidators after uncovering unquantifiable losses.

The Financial Services Authority in Britain is looking into allegations that some claims were not entered into the firm's accounts, and the Serious Fraud Office, which investigates complex frauds involving more than £1 million, is trying to establish if there is a case against the company directors.