RSA share price dips as hurricanes hit third-quarter performance

on Nov 2, 2017
Updated: Mar 11, 2020

Shares in RSA Insurance (LON:RSA) have fallen into the red in today’s session, after the blue-chip insurer revealed that its performance had been hit by the recent hurricanes in the US and the Caribbean. The company, however, nevertheless posted a rise in premium income for the year-to-date.

As of 12:07 BST, RSA’s share price had lost 0.24 percent to 631.50p, having traded more than one percent lower earlier in the session. The stock is underperforming the broader market, with the benchmark FTSE 100 having climbed into positive territory and currently standing 0.52 percent higher at 7,526.84 points after the Bank of England hiked interest rates for the first time in a decade. The group’s shares have added just under 16 percent to their value over the past year, and are up by more than seven percent in the year-to-date.

Third-quarter results

RSA announced in a statement today that its year-to-date net written premiums stood at £5.01 billion at Q3, up three percent year-on-year at constant forex rates. The company noted that its earnings per share were ahead of last year, but were held back by the quarter’s underwriting results. The group revealed that its performance was impacted by US/Caribbean hurricane costs as well as continuing adverse household and large loss experience. 

“The progress at RSA overall leaves Group profits ahead of the same period in 2016 though by less than we had targeted,” the FTSE 100 insurer’s chief executive Stephen Hester commented in the statement, adding that the insurer was “taking further underwriting action in some portfolios to improve performance for 2018”.

ShoreCap remains bearish

Analysts at Shore Capital reiterated their ‘sell’ rating on RSA today, without specifying a price target on the shares. According to MarketBeat, the FTSE 100 insurer currently has a consensus ‘hold’ rating and an average price target of 648.82p. The results came after JPMorgan recently turned bullish on the stock. 

As of 12:33 GMT, Thursday, 02 November, RSA Insurance Group plc share price is 632.00p.