Join our community of smart investors

RSA reports solid progress

TIP UPDATE: RSA is performing reasonably enough - but the shares are expensively rated for an insurer that's only moderately profitable by sector standards
August 5, 2010

RSA Insurance's half-year figures revealed flat pre-tax profits on the year at £302m - although, with a combined ratio (of claims to premiums) of 94.8 per cent, the group did manage a respectably profitable underwriting performance.

IC TIP: Sell at 134p

What's more, RSA has been pushing through decent-looking premium rate increases. The UK personal motor book, for instance, managed to grow rates by 13 per cent in the period, while the Canadian unit's household account saw rates rise 12 per cent. Indeed, the group reported reasonable singe-digit premium rate increases for almost all of its other business lines. And the investment book, which is focused on safe-looking cash and bonds, managed an attractive underlying yield of 3.9 per cent.

What we said:

When: 5 March 2010

Price: 130p

Tip performance to date: -3 per cent