RSA Insurance Group has agreed to sell Singapore- and Hong Kong-based businesses to Allied World Assurance Company for a total of around £130 million. Further disposals are expected.

UK-listed RSA Insurance Group has agreed to sell Singapore- and Hong Kong-based businesses to Allied World Assurance Company for a total of around £130 million ($215.5 million) in cash. Further disposals are expected.

The deal is subject to regulatory approval. Shares in RSA, at £4.36 per share, were unchanged from the open on Friday when the announcement was made, having risen to £4.41 per share.

Under the terms of the agreement, Allied World will buy RSA Singapore and RSA Hong Kong, according to a statement last Friday.

The transactions are expected to result in a gain on sale of approximately £110 million and an addition to RSA’s tangible net assets of about £95 million, adding to its capital strength, it said.

The transaction is expected to be completed during the first half of next year, further improving the group’s capital strength.

“This transaction builds further on the momentum of our recently announced disposals in the Baltics, Poland, Canada (Noraxis) and China, and represents continued progress against our aim of tightening the strategic focus of the group. Further disposals are targeted over the next 12-18 months to complete this process,” Stephen Hester, RSA group chief executive, said.

RSA Singapore and RSA Hong Kong underwrite a balanced mix of commercial specialty and retail (both commercial and personal) business.

RSA’s operations in Singapore had total assets of £236 million and net assets of £30 million at 31 December 2013. Net written premiums in 2013 were £66 million with a pre-tax profit of £12 million. The consideration payable for RSA Singapore is approximately £93 million. The operations in Hong Kong had total assets of £185 million and net assets of £0.4 million at 31 December 2013. Net written premiums in 2013 were £47 million with a pre-tax profit of £5 million. The consideration payable for RSA Hong Kong is about £37 million.

As part of the transaction, senior management are expected to remain with the respective businesses at completion.