RSA Insurance (RSA) made further progress in the first half of the year towards strengthening the balance sheet and improving operational performance. One of the immediate benefits was the reinstatement of the half-year dividend
Group operating profit jumped from £141m in the first half of last year to £259m, with the £133m of non-recurring charges booked in the previous first half down to £69m. RSA also made further progress in selling off non-core businesses, with disposals completed in Hong Kong, Singapore and China, and further sales in the pipeline. To date, these deals have delivered £835m in proceeds, equating to an actual profit of around £500m. Streamlining the business model shaved 10 per cent off group controllable costs to £932m, and RSA is on track for cost reductions of more than £250m by 2017.
Group underwriting bounced back, with record profits in the UK and Canada turning the previous £23m loss into a profit of £101m. Even the troubled Irish underwriting operation showed a marked improvement, with losses narrowing from £65m to just £16m. Crucially, the core group combined ratio of claims to income improved from a loss-making 100.3 per cent to 96.9 per cent.
Prior to these numbers, broker JPMorgan Cazenove was forecasting year-end tangible book value of 307p (from 286p in 2014).
| RSA INSURANCE (RSA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 516.5p | MARKET VALUE: | £5.25bn | |
| TOUCH: | 516-516.5p | 12-MONTH HIGH: | 528p | LOW: 392p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 366p* | COMBINED RATIO: | 97.2% | |
| Half-year to 30 Jun | Net premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 3.77 | 69 | 223 | nil |
| 2015 | 3.44 | 288 | 206 | 3.5 |
| % change | -9 | +317 | -8 | - |
Ex-div: 10 Sep Payment: 15 Oct *Includes intangible assets of £728m, or 72p a share | ||||
