Zurich Insurance abandoned its proposed £5.6 billion bid for Britain’s RSA yesterday, after forecasting a £129 million third-quarter loss .

Zurich said it would conduct a review to improve the performance of its general insurance business sending RSA shares down by as much as 23 per cent.

RSA said Zurich had found nothing untoward in its “due diligence” checks on its books that would have thwarted a deal on the 550 pence per share terms proposed on August 25.

RSA also said its July and August trading had been positive, but its shares were trading at 404p at 0813 GMT, eight per cent below their closing price the day before Zurich said it was weighing a bid.

Zurich, whose shares were down 1.6 per cent, announced aggregate losses of around $275 million from the massive explosions at a container storage station in Tianjin last month. It said the final cost was uncertain but it did not expect a significant rise in claims.