Shares in RSA Insurance (LON:RSA) have advanced in London in today’s session even as the blue-chip group revealed the impact of the ‘Beast from the East’ on its quarterly profits. Investors, however, have instead cheered the rise in the insurer’s gross written premiums during the reported period.
As of 13:59 BST, RSA’s share price had added 2.36 percent to 650.40p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.20 percent lower at 7,647.29 points. The group’s shares have added more than five percent to their value over the past year, as compared with about a 3.4-percent gain in the Footsie.
RSA posts Q1 results
RSA announced in a statement today that its pre-tax profits for the first quarter of the year were lower on an underlying basis reflecting elevated winter weather costs being not fully offset by other improvements. The group’s weather costs accounted for 5.1 percent of net earned premiums, or 3.1 points higher than in the prior-year period, and 1.9 points higher than the five-year average of 3.2 percent, with all regions impacted. The update comes after FTSE 100 peer Direct Line Group (LON:DLG) recently disclosed that it would take a £50-million hit related to the recent cold weather snap in the UK.
RSA, however, also revealed that its gross written premiums had come in at £2.1 billion, one percent up at constant FX rates.
“We are happy with RSA's progress at this early stage of the year,” the insurer’s chief executive Stephen Hester commented in the statement, adding that the group’s headlines profits were ‘strongly up’ due to the absence of restructuring costs.
Analysts weigh in
“Underwriting profits have been negatively impacted by a poor winter,” Nicholas Hyett a Hargreaves Lansdown commented in a note, adding, however, that the blue-chip insurer had also “delivered improvements in its large loss ratio, attractional loss ratio and controllable loss ratio compared to last year”.