Insurer RSA posts growth on ‘strong’ Irish price rises
In Ireland, RSA said in its trading update that it posted “continued premium growth due to strong pricing increases as part of the turnaround plan”.
RSA is in the middle of a large-scale restructuring under the stewardship of former Royal Bank of Scotland boss Mr Hester, which has included selling some overseas businesses and cutting costs.
Last year rival Zurich walked away from an agreed takeover of RSA due to problems in its own business. The shares were little changed in London, though they have climbed 27.5% this year on recovery hopes.
“The share price has rallied well ... but on the downside we believe in doing so it has reduced the possibility the company will be bid for,” Barrie Cornes at Panmure Gordon said, cutting his recommendation to a “hold” from “buy”.
“My guess is it would be our best ever nine months of underwriting profits ... because of the very active self-improvement programmes,” Mr Hester told reporters after the insurer reported a 5% drop in net written premiums to £4.82bn for the first nine months due to the impact of asset sales.
Underwriting profits in the third quarter were strong, RSA said in a trading statement, following a record underwriting profit in the first half.
Mr Hester told Reuters the process was “advanced” to sell or reinsure the firm’s legacy insurance business, which consists mainly of asbestos claims from its employers’ and public liability cover dating back to as much as 50 years ago.
The firm’s commercial business was exposed to Hurricane Matthew, which hit the US and the Caribbean last month with estimates of up to $8bn (€7.22bn) in insurance losses, and also to the collapse of South Korean shipping firm Hanjin, but losses were likely to be small, Mr Hester said.
RSA’s cost-cutting programme was likely to reach £250m by the end of 2016.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
