Shares in RSA Insurance (LON:RSA) have fallen deep into the red in today’s session, as the blue-chip group cautioned that its pre-tax profit for the year-to-date was lower on an underlying basis. The news came in an unscheduled update, with the insurer revealing that large weather losses had hit its business in the UK.
As of 09:42 BST, RSA’s share price had given up 8.80 percent to 578.20p, weighing on the benchmark FTSE 100 index which currently stands 0.02 percent higher at 7,546.82 points. The insurer’s shares have lost more than six percent of their value over the past year, as compared with about a three-percent rise in the Footsie.
RSA reports ‘disappointing quarter’
RSA said in a statement this morning that its pre-tax profit for the year-to-date was higher than in the prior-year period, but lower on an underlying basis due primarily to elevated weather costs. The company explained that it had seen large weather losses above expected levels in the third quarter, but particularly elevated in the UK, which was hit by the ‘Beast from the East’ earlier this year. Net premiums in the year-to-date stand at £4.9 billion, down two percent at a headline level.
“RSA’s international businesses performed well in Q3, making strong progress against our best-in-class ambitions. However, our UK and 'London market' business reported an underwriting loss which is disappointing,” the group’s chief executive Stephen Hester commented in the statement, reassuring investors that “actions to improve in the UK are well underway and we are determined to restore satisfactory performance whilst continuing our progress internationally”.
ShoreCap places group ‘under review’
According to MarketBeat, Shore Capital has placed RSA ‘under review’ today. The group’s current consensus rating stands at ‘hold,’ with an average price target of 686.60p.