Zurich Insurance has backed away from its £5.6bn bid of UK-based RSA Insurance Group following estimated losses of £177m, which were incurred from the blast at Tianjin Port’s container storage facility in August. On September 21, Zurich announced that it is no longer in a position to move ahead with the deal, although, some industry experts believe that its quarterly losses also had a role to play in pulling out of the takeover.

RSA has maintained that Zurich’s decision has nothing to do with its financial position or due diligence compliance

News of Zurich’s proposed bid had increased RSA’s share prices by 15 percent in July. However, after the news of the collapsed deal, which would have been the biggest insurance takeover for over a decade, RSA’s shares plummeted by 21 percent to 302.3p, according to The Independent.

If successful, it was hoped that the deal would rejuvenate the British insurance market and also expand Zurich’s presence in the UK, giving it a leading position. Zurich instead plans to review and improve its performance in its general insurance sector, in which it has recently experienced disappointing revenue and large losses, aside from the Tianjin blast.

RSA has maintained that Zurich’s decision has nothing to do with its financial position or due diligence compliance. In response to its falling share prices, RSA also announced that its performance in July and August has been positive and exceeded expected revenue.

RSA has had a strategy in place to drastically overhaul the business since 2014 following a £244m loss in 2013, an accounting scandal in Ireland and growing competition in the home and car insurance market.  Although it is now facing a setback due to Zurich backing out, with pre-tax profits for the first half of 2015 amounting to £288, this year’s performance indicates that the business is indeed beginning to turnaround.