By Simon Jessop and Esha Vaish
(Reuters) - British insurer RSA (L:RSA) said it would sell its Latin American operations to Colombia's GrupoSura (CN:SIS) for about 403 million pounds ($617 million) in cash as it retreats from secondary markets.
The deal is the latest move by Chief Executive Stephen Hester to sell off non-core assets and shore up the firm's balance sheet. It comes after it received a friendly takeover approach from rival Zurich Insurance (VX:ZURN).
RSA, which has given Zurich four weeks to come up with a firm takeover offer, said it had informed the insurer about the sales process prior to Zurich's announcement last month.
The outcome of Zurich's possible offer will not affect the transaction, it added.
RSA said the deal with Suramericana's insurance business was expected to be significantly positive for its capital ratios on all measures on completion.
"With RSA's focus on its largest markets in the UK & Ireland, Scandinavia and Canada, it has become increasingly clear to us that RSA is no longer the best strategic owner of these businesses," Hester said in a statement.
"In Suramericana we have an experienced and committed regional player who can make the business a much more central part of their strategy."
At 0830 GMT, RSA shares were up 1.3 percent, in line with the increase in the FTSE 100 Index (FTSE).
RSA Latin America has operations in Chile, Argentina, Brazil, Mexico, Colombia and Uruguay. It had total assets of 1.34 billion pounds at end-December, with net tangible assets of 258 million pounds, RSA said.
Net written premiums in the first half of 2015 were 333 million pounds with a post-tax profit of 9 million pounds, it added.
RSA posted a forecast-beating pretax profit of 288 million pounds for the first half, helped by benign weather conditions.
