RSA share price rallies as group grows full-year earnings

on Feb 23, 2017
Updated: Oct 21, 2019

Shares in RSA Insurance (LON:RSA) have jumped more than five percent in London in today’s session, with investors responding positively to the company’s full-year results which showed a rise in underlying earnings. The insurer, which was the object of a failed takeover approach by Swiss peer Zurich in 2015, further hiked its payout to shareholders.

As of 13:28 GMT, RSA’s share price had added 5.63 percent to stand at 609.50p, outperforming the benchmark FTSE 100 index which is currently 0.01 percent better off at 7,303.02 points. The group’s shares have added some 50 percent over the past year, and are up by about four percent in the year-to-date.
RSA announced in a statement today that its underlying earnings per share had surged 42 percent to 39.5 last year, while its operating profit came in 25 percent higher at £655 million. The insurer also posted record underwriting profit of £380 million, up 73 percent on 2015’s £220 million. The company further declared a final dividend of 11p per share, taking its total payout for 2016 to 16p, marking a 52-percent rise.

“In 2016 RSA took major strides forward, moving seamlessly from ‘successful turnaround’ to organic outperformance,” Stephen Hester, the former RBS (LON:RBS) boss who took the helm at RSA in the wake of an accounting scandal at the group’s Irish unit in 2013, commented in the statement, adding that the insurer’s ambition now was to drive its performance towards ‘best in class’ levels.
Reuters further quoted Hester as pointing out that the FTSE 100 group was better off alone after Zurich Insurance abandoned plans to buy the company in 2015.
“Our shareholders are benefiting significantly from not having sold to Zurich,” Hester told a media call, as quoted by the newswire, adding that there were no bids on the table for RSA, and that the firm “does not need a deal”.
As of 13:58 GMT, Thursday, 23 February, RSA Insurance Group plc share price is 609.65p.

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