Insurance firm Royal & SunAlliance has signed an agreement with Direct Insurance Financial Investments to create a joint venture to access markets in eastern Europe and Russia.

The joint venture will own Link4, a direct insurance operation in Poland, and hopes to replicate this successful business model in the Czech Republic and Russia.

The framework agreement is non-binding and subject to subject to confirmatory due diligence by Royal &SunAlliance (R&SA). Once approved, the insurance company will purchase a 50% shareholding in and joint control of the joint venture for GBP44 million. Furthermore, R&SA plans to invest another GBP44 million to fund future growth of the venture, matching Direct Insurance Financial Investment’s (DIFI) current investment.

This is an exciting opportunity to invest in the number one direct insurer in the Polish market and a strong base from which to export this successful model into other attractive markets, commented Paul Whittaker, R&SA emerging markets CEO. I look forward to combining the group’s technical excellence with DIFI’s track record of quickly establishing and building leading positions in new markets.