British insurer Royal & Sun Alliance said on Tuesday it has received a £5.6-billion ($8.8-billion, 7.7-billion-euro) takeover approach from Swiss rival Zurich Insurance.

RSA announced in a statement that Zurich has made an informal bid of 550 pence per share, adding that the pair are now in talks.

"The board has indicated to Zurich that it would be willing to recommend an offer at the level of the possible offer to RSA shareholders subject to the satisfactory resolution of the other terms of the offer," the British firm said in a statement.

"Accordingly, the board is in discussions with Zurich in relation to these terms."

Under the terms of the proposal, RSA shareholders reserve the right to receive the recently declared interim dividend of 3.5 pence per share.

The potential offer is conditional on the approval of the RSA board, as well as due diligence.

Zurich had revealed in late July that it was evaluating a potential bid for RSA but gave no indication of price. RSA said at the time that it had not held talks or received a proposal.