(Corrects amount allocated in over-allotment in paragraph 3)
ZURICH, June 27 (Reuters) - Swiss Re has set a price range of 2.80 to 3.30 pounds for shares in the flotation of its UK life assurance business ReAssure, the world's second-largest reinsurance company said on Thursday.
The price range implies a market capitalisation of 2.8 billion ($3.55 billion) to 3.3 billion pounds ($4.19 billion) for the ReAssure flotation due to take place next month.
The offer is expected to deliver a free float of 26% of ReAssure's issued share capital. Shares representing up to 15% of the initial offer will be made available as an over-allotment option, which if exercised will take the free float up to nearly 30%.
Swiss Re said the IPO prospectus is due to be published later on Thursday, pending approval from Britain's Financial Conduct Authority.
Zurich-based Swiss Re is spinning off ReAssure to put the business under a more favourable regulatory regime and give it easier access to capital to fund its expansion.
ReAssure, Britain's sixth-largest life insurer, has 68.7 billion pounds of assets under administration and focuses on so-called closed book policies that are shut to new customers.
Under the flotation plans, Swiss Re would cut its stake in ReAssure to below 50% from 75% now. Japan's MS&AD Insurance Group Holdings intends to keep its holding at 25% after the initial public offering.
$1 = 0.7885 pounds Reporting by John Revill; Editing by Michael Shields