Royal & Sun Alliance Insurance Group has agreed to acquire a 50% stake in Poland's Global Direct Insurance Investments. In doing so, the UK general insurer will enter into a joint venture with Israel's Direct Insurance Financial Investments, which will enable the group to access the rapidly growing eastern European and Russian insurance markets.

Under the terms of the deal, Royal & Sun Alliance Insurance Group (RSA) will pay GBP44 million in cash for a 50% shareholding, together with a further GBP44 million to fund future growth, GBP16 million of which will be contributed at completion for working capital requirements.

The joint venture is in line with RSA’s emerging markets strategy and will accelerate delivery of a direct personal lines proposition in the region.

Global Direct Insurance Investments’ (GDI) main operation is Link4, a Polish direct motor insurer. Established in 2003, Link4 has grown rapidly, writing motor and household business by phone and internet. In 2006, Link4’s net written premiums increased by 42% to GBP30 million.

The joint venture aims to replicate this successful business model in other markets in the region. GDI recently launched Direct Pojistovna, a direct insurance operation in the Czech Republic, and expects to start writing direct business in Russia in 2008.

The transaction is subject to a number of conditions including obtaining Direct Insurance Financial Investments shareholder approval and regulatory consents.