Allied World Assurance Company has signed an agreement with Royal & Sun Alliance Insurance (RSA) to acquire its Hong Kong and Singapore operations for around $215m.

Allied will fund the purchase price with cash on hand, subject to adjustments.

As part of the deal, Allied will acquire the in-force portfolio and related assets and liabilities of both operations.

RSA’s business comprises niche group of specialty lines, including casualty, construction and engineering, marine and property.

The company has been operating in the region for more than 40 years in Hong Kong and over 180 years in Singapore.

The businesses reported total gross premiums written of around $250m in 2013.

According to Allied, an additional $90m will be required to appropriately capitalize the business on an ongoing basis.

Allied World Assurance Company president and CEO Scott Carmilani said the transaction will significantly deepen and broaden firm’s presence in Asia.

"The business brings regional market leadership, complementary product offerings, extensive distribution and an experienced and talented management team to Allied World, strengthening our global insurance franchise," Carmilani added.

Subject to regulatory approvals in Singapore and Hong Kong as well as court approval in Singapore, the transaction is expected be completed during the first half of 2015.

In Hong Kong and Singapore, Allied World’s current operations include an established commercial insurance business.

Allied World, through its subsidiaries, provides property, casualty and specialty insurance and reinsurance solutions.