He added: ‘But any capital deployment would need to meet the same hurdles that we apply to any other investment.’.
Advertisement
Takeover target RSA Insurance has trebled its half year profits as chief executive Stephen Hester’s “action plan” for the British insurer shows signs it is coming to fruition.
Updating on trading for the six months to the end of June, RSA said premiums rose 2pc on a core basis, though this was down 3pc to £3.4bn at a group level, with disposals accounting for the drop.
Fair weather and fewer disasters could put a dampener on Zurich’s attempt to buy RSA, after the FTSE 100-listed insurer posted stronger than expected interim results, thanks to fewer claims related to storms and major incidents.
Hester said they were “excellent results” and that RSA had moved from the bottom to the middle of the class, although there was still room for improvement.
RSA reinstated its interim dividend at 3.5 pence a share, against a forecast 3.4 pence.
“‘There is definitely scope for a similar-size deal or even larger in Europe, ” said Sam Evans, global insurance deal advisory lead at KPMG in London, whose clients include both Zurich and RSA.
He said RSA had “a suberb number of assets around the globe”, adding it may also be attractive to rivals such as Allianz and Generali.
This came after an issue in the group’s Irish arm, where a £200 million black hole was discovered in the division’s finances.
The insurer said its underwriting profits in the UK were at their highest since 2006 due to a more disciplined approach and hit a 10-year record at its sizeble Canadian business.
The firm said it expected the insurance market to remain competitive, with the group having to make trade-offs between sales and strong pricing.
“We are making fundamental improvements to RSA, as promised”.
“We firmly intend to build a company that will thereby outperform for customers and for shareholders”.
Advertisement
Net profit for the quarter fell 1 percent year on year to $840 million, compared to the average estimate for a 12.8 percent rise to $944 million in a Reuters poll of seven analysts.
