Royal & Sun Alliance InsurancesgroupsPlc, whose stock fell 75 percent in a year, plans to sell as much as A.1 billion (US.27 billion) of shares in its Australian and New Zealand arm to raise cash needed to pay claims.

　　The May sale would be the world's largest initial public offering this year. Global IPOs have slumped 80 percent in the first quarter from a year ago as the Iraq war stifles equity demand. Royal & Sun hopes investors will be attracted to a unit that insures more than 2 million cars and almost 1 million homes.

　　"They'll price to sell it because Royal & Sun needs the money," said Brian Ingham, who manages A million at IBM Matrix Asset Management. He added that he wouldn't be "overly surprised" if the ProminasgroupsLtd offer failed.

　　Royal & Sun is seeking funds to plug an 800 million pound (US.26 billion) shortfall in capital, in part to pay claims from World Trade Center attacks and from people who became sick from asbestos-related diseases. European rivals including Zurich Financial Services AG have already raised US billion from investors after a three-year stock plunge eroded their funds.

　　General insurers in Australia and New Zealand have increased premium prices by about a quarter in the past year, softening the impact of falling stocks. Promina includes Australia's No 3 car and home insurer, New Zealand's biggest combined general and life insurer and the Tyndall fund management business.

　　Institutions will pay between A.50 and A a share. Retail investors will pay 10 cents less. Promina plans to sell as many as 1.057 billion shares.

　　If priced at the lower end of the range, the company would raise A.6 billion. Royal & Sun will receive a maximum A.95 billion from the sale.

　　Promina forecasts net profit in 2003 of A million, or 17.8 cents a share, from net earned premium of A.4 billion. It reported a A million loss last year when it wrote down goodwill by A million.

　　"We're very confident of the overall acceptance of this offer," Chief Executive Mike Wilkins said, adding higher premium prices are making the general insurance market more attractive. "There's nothing that will cause Promina to pull this float."

　　Global IPOs, in any currency, fell to US.3 billion in the first quarter, from US.3 billion in the same period a year ago, according to Bloomberg data.

　　Promina brands in Australia include AAMI, Australian Pensioners Insurance Agency, Shannons, Royal & Sun Alliance and Tyndall. In New Zealand, they include AA Insurance, Royal & Sun Alliance, Guardian Trust, SIS and International Marine.

　　The businesses include commercial insurance, mortgage insurance and income protection, which some investors say are less attractive than AAMI's car and home insurance business.

　　"General insurance is quite attractive at the moment and AAMI is very profitable, but as asgroupsPromina isn't as clean as some others," said Neil Margolis, who helps manage A billion at Alliance Capital Management Ltd. "It all depends on price, and institutional investors will set the price."

　　Promina, like its parent Royal & Sun, is exposed to asbestos claims through its commercial insurance business.

　　"Unlike its locally listed peers, Promina has been an underwriter of commercial risks as far back as the 1950s, giving it potential exposure to asbestos-related claims," Goldman SachssgroupsInc said in a report. "This situation warrants close attention."

　　Professional investors will bid for stock from May 7 to May 9, with shares to start trading on May 12.