After £40m of UK weather-related claims, as well as a £35m hit from May's two Italian earthquakes, RSA's combined ratio (of claims to premiums) deteriorated by two percentage points in the period. But a 95.2 per cent ratio still leaves RSA as a solidly profitable underwriter and, with premium rates rising across the book and a fat dividend in prospect, the shares remain attractive.
RSA's personal household account saw premium rates grow by 11 per cent in Canada and 7 per cent in Scandinavia. The UK commercial motor book delivered a 9 per cent rate increase, too, while the UK commercial liability account saw rates rise 6 per cent. And while RSA's emerging market operations in Latin America, Asia and the Middle East and Central & eastern Europe remain modest, they are growing fast - the underwriting result here more than doubled to £7m.
The investment book looks in good shape, too. Some 89 per cent of the portfolio is placed in cash and safe-looking bonds and it managed a 3.7 per cent yield - not bad in today's ultra-low interest rate environment.
Before these figures, broker Numis Securities was expecting full-year pre-tax profit of £656.7m, giving EPS of 13.5p (£613m and 11.9p for 2011) and net tangible assets (NTA) of 79p.
RSA INSURANCE (RSA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 111.4p | MARKET VALUE: | £3.96bn | |
| TOUCH: | 111.3-111.5p | 12-MONTH HIGH: | 132p | LOW: 97p |
| DIVIDEND YIELD: | 8.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 105p* | COMBINED RATIO: | 95.2% | |
| Half-year to 30 Jun | Net premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 4.19 | 376 | 379 | 3.34 |
| 2012 | 4.28 | 233 | 295 | 3.41 |
| % change | +2 | - | - | +2 |
Ex-div: 26 Sep Payment: 23 Nov *Includes intangible assets of £1.36bn, or 38p a share | ||||
