RSA says it has obtained value for its shareholders

Royal & Sun said it will receive £4.1m ($7.6m) for the business, made up of a £700,000 payment, and assets retained - mainly cash and investments of £3.4m.

At 31 December 2003 the net assets of the Pakistan branch were £2m, with written premiums of £2.4m.

The sale of its Pakistan business is subject to regulatory approvals.

Royal & Sun Alliance Pakistan currently underwrites a general portfolio of mainly commercial business.

"The disposal of our business in Pakistan is consistent with our strategic direction and I am pleased that we have been able to achieve an exit at a price which delivers value to our shareholders," said Simon Lee, Royal and Sun Alliance CEO of international business.

Balance sheet

Life insurers have taken a battering in recent years after a slump in share prices affected their ability to underwrite new and existing policies.

They also have been hit by tighter industry regulation and a surge in the number of claims in the US.

Royal & Sun has had to cut about 20,000 staff and sell new shares to boost profits and shore up its balance sheet.

The company is also one of a number that have pulled the plug on their UK life operations.