Despite a £48m net hit from flooding-related claims in Canada, RSA Insurance (RSA) still saw its half-year combined ratio (of claims to premiums) improve by 1.2 percentage points to a decently profitable 94.2 per cent. Moreover, premium rates still look fairly firm, with modest increases reported for most business lines.
In fact, RSA's personal household accounts in Canada and Scandinavia saw rates rise 7 per cent and 8 per cent, respectively. In those two regions, RSA's commercial property and commercial liability rates have also continued rising - by between 3 per cent and 4 per cent. But the UK personal book looks weaker, with motor rates falling 3 per cent, while the household account grew rates by just 1 per cent. The UK commercial book fared better, though - liability rates rose 5 per cent, for example, and property rates grew 4 per cent.
Meanwhile, RSA's investment book remains focused on safe-looking cash and bonds (90 per cent of the portfolio) and that delivered an underlying yield of 3.6 per cent - not bad in today's weak bond yield environment.
Broker Numis Securities expects full-year pre-tax profit of £567m and EPS of 11.4p (from £479m and 96.3p in 2012) and net tangible assets (NTA) of 66.5p a share.
RSA INSURANCE (RSA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 126p | MARKET VALUE: | £4.6bn | |
| TOUCH: | 126-127p | 12-MONTH HIGH: | 137p | LOW: 107p |
| DIVIDEND YIELD: | 4.9% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 99p* | COMBINED RATIO: | 94.2% | |
| Half-year to 30 Jun | Net premiums (£bn) | Pre-tax profit (£m) | Investment return (£m) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 4.28 | 219 | 295 | 3.41 |
| 2013 | 4.65 | 250 | 275 | 2.28 |
| % change | +9 | +14 | -7 | -33 |
Ex-div: 25 Sep Payment: 22 Nov *Includes intangible assets of £1.5bn, or 42p a share | ||||
