(Bloomberg) -- Zurich Insurance Group AG abandoned a 5.6 billion-pound ($8.7 billion) offer for RSA Insurance Group Plc as the Swiss company grapples with a surge in claims that will lead to a quarterly loss at its biggest unit.

The biggest Swiss insurer expects a loss of $200 million at its general insurance unit in the third quarter, the company said in a statement Monday. RSA dropped 20 percent, reducing its market value by more than 1 billion pounds, while Zurich shares fell 1.3 percent as of 1:44 p.m. in Zurich.

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