RSA share price: Group set to unveil landmark pension settlement

RSA Insurance Group (LON:RSA) is set to clear a major hurdle in its ongoing turnaround by injecting millions of pounds into its pension scheme, The Telegraph has revealed. The news comes ahead of the blue-chip insurer’s full-year results this Thursday.

RSA’s share price has surged in today’s session, having added 1.44 percent to 415.00p as of 14:48 GMT. The gains are part of a broader market rally which has seen the FTSE 100 climb 1.87 percent to 6,061.56 points. In the year-to-date, RSA’s shares have fallen 2.79 percent, as compared with a 2.91-percent dip in the blue-chip index.
The Telegraph reported over the weekend that RSA, the subject of a failed takeover bid from Zurich Insurance last year, was expected to unveil a settlement with its pension trustees as it updates investors on its full-year results on Thursday. The blue-chip insurer had pension liabilities of more than £7 billion last year, and had signalled that it had the means to fund 97 percent of its obligations. RSA’s funding shortfall was thought to be one of the stumbling blocks for the Swiss insurer’s takeover ambitions last year.

The potential settlement would come at a key period for the company which has been recovering from a string of profit warnings and an accounting scandal at its Irish unit. The recovery plan of the group’s chief executive Stephen Hester is likely to reward investors with a rise in dividends when the company posts its full-year results. The Telegraph notes that analysts have forecast a nine-percent fall in RSA’s net written premiums to £6.8 billion, reflecting the group’s recent asset disposals, while operating profits are expected to have climbed from £365 million in 2014 to £481 million last year.
As of 15:31 GMT, Monday, 22 February, RSA Insurance Group plc share price is 413.80p.