RSA share price soars as insurer insists turnaround is on track after collapsed Zurich deal
The UK insurer has been pummelled by currency headwinds and volatile financial markets, but insists its turnaround remains firmly on track – despite the failed deal with Swiss rival Zurich.
The figures
RSA reported underlying premium income of £4.4bn for the year to date, up one per cent against last year. The insurer said profit trends for the third quarter were “well above” last year’s.
The company’s total agreed disposal proceeds were £1.2bn for the year to date, following the £403m sale of its Latin America division.
Two years ago the insurer made a £244m pre-tax loss, but having worked to turn that around, last year it posted a £60m profit.
The company's shares soared on the possibility of a Zurich takeover, only to plummet 20 per cent in mid-September when the offer was withdrawn. Following today's results, RSA was trading 2.9 per cent up in morning trading, making it the FTSE's second-biggest riser.
Why it’s interesting
The insurer was poised to be taken over by Swiss rival Zurich this summer, when the £5.6bn offer was suddenly withdrawn.
RSA’s chief executive Stephen Hester has insisted that the company doesn’t need a buyer. Today he added the “unsolicited approach” from Zurich was nothing more than a “distraction”.
Hester has been working to turn RSA around, and the company said today this was well on track, with yearly profits growing “ahead of plans” – although the insurer also flagged that the strong sterling had impacted on its results.
Hester plans to breathe new life into the 300 year-old insurer by focusing more on its core business regions of UK, Canada and Scandinavia, while disposing of its businesses in other regions.
What they said
Hester said:
We are very pleased with progress to date on RSA's turnaround. If we can keep the improvements coming, the future is bright for RSA as a high quality, high performing leader in its markets.
Insurance markets remain challenging and financial markets volatile. Within those constraints, RSA is making strong progress on the path to high quality and sustained business outperformance.