The Swiss financial services group Zurich, parent company of leading local government insurer Zurich Municipal, is ...
The Swiss financial services group Zurich, parent company of leading local government insurer Zurich Municipal, is discussing a£23 billion mega-merger with the tobacco and insurance conglomerate BAT.
If the merger goes ahead it will create Europe's second biggest insurer by market value. But the British public sector insurance market is unlikely to be significantly affected. Zurich Municipal currently controls around two-thirds of the local authority insurance market whereas BAT - which owns Eagle Star and Allied Dunbar in the UK - has 'near non-existent' local government interests.
But the merger would do Zurich Municipal no harm as its Swiss parent would have a controlling stake of 55% of the new company. This would in turn enhance Zurich Municipal's asset base.
As BAT has only minimal public sector interests and any deal between the companies will not be finalised until at least the middle of next year, the merger is unlikely to affect the distribution of the£100 million worth of local authority insurance contracts which are due for renewal in April.