Stockbroker Merrill Lynch predicts the market value for the Asia-Pacific assets of Royal & SunAlliance could stand at $2.1 billion. The valuation comes prior to the insurer being publicly floated on the stockmarket mid next year.

London-based R&SA wants to strengthen its capital levels before the float as stockbrokers are reportedly anticipating the group will face difficulty in raising shares in the midst of weak investment markets.

IAG’s unsuccessful attempt to raise shares from ordinary shareholders in last month’s float is seen by some brokers and analysts as indicative of how difficult it will be for R&SA. If that is the case, R&SA will have to raise the money through institutional investors as IAG did.