Shares in RSA Insurance (LON:RSA) have fallen marginally into the red this morning as the blue-chip insurer revealed that the cold weather snap in the UK earlier this year had hurt its half-year performance. The group, however, hiked its payout to shareholders.
As of 10:22 BST, RSA’s share price had given up 0.34 percent to 639.40p, outperforming the broader UK market, with the benchmark FTSE 100 index having fallen deep into the red and currently standing 0.95 percent lower at 7,580.23 points. The group’s shares have lost about 2.4 percent of their value over the past year, as compared with about a 2.4-percent gain in the Footsie.
RSA announced in a statement this morning that its half-year operating profit had dipped 15 percent year-on-year to £304 million due to adverse weather. The group’s underwriting profit meanwhile came in 23 percent lower at £171 million, while the company’s weather costs were elevated at 4.9 percent versus a benign prior year. Today’s update follows the insurer’s first-quarter results in May when the company revealed that its weather costs had accounted for 5.1 percent of net earned premiums, or 3.1 points higher than in the prior-year period.
“First half underwriting results were below our ambitions due to adverse weather costs,” RSA’s chief executive Steven Hester commented in today’s statement, adding that the group had showed “areas of excellent performance” on an underlying basis.
Hester further pointed out that RSA was entering the second half of the year “with confidence, while mindful of market challenges”. The company expects market conditions to be comparable to the first half and is targeting “improved underwriting profits based on more normal weather costs” and progress in other aspects of the business.
The blue-chip insurer announced an interim dividend of 7.3p per ordinary share, up 11 percent year-on-year.