Personal and commercial non-life insurer RSA (RSA) rises 2.2% to 427.4p on a positive first quarter update
Operating profits are ahead of expectations, partly helped by falling costs. This is also the result of a series of international asset disposals, where were implemented following a string of profit warnings.
The core business has surprised with net written premiums increasing 1% to £1.5 billion year-on-year. This growth came despite competition in the general insurance market putting premiums under pressure.
RSA, which writes motor, home, travel and marine cover among its business lines, expects to make £380 million from its investments this year. This beats the £365 million it made last year, with the growth delivered in spite of the low interest rate environment.
One negative in the update is a warning that the strength of the pound against currencies in Denmark, Sweden and Canada will impact the business this year.
Former Royal Bank of Scotland (RBS) boss Stephen Hester was appointed 15 months ago after an accounting scandal in Ireland led to a series of profit warnings. The disposals are part of his restructuring plan to return the insurer to a stronger footing, but the company still has a long way to go before achieving this.
On Friday (8 May) Hester faces his shareholders and will attempt to secure a huge bonus on top of his £950k salary. This is expected to be tricky following a series of missed targets in 2014.
