Rsa Insurance Group Ld Share Discussion Threads

[solarno lopez] 13/12/2013 09:35

who ever said it would go to 85p was spot on well done

[spob] 13/12/2013 09:34

13 December 8:49am

RSA warns as losses at Irish unit mount

By Andy Sharman

FT

Shares in RSA lost a fifth of their value after the UK insurer's chief executive stepped down and it issued a third profit warning in six weeks and put its dividend under review.

The company said the capital shortfall discovered in the Irish business last month had more than doubled to £200m, which would be covered by the immediate injection of £130m into the unit. It initially estimated the funding shortfall at £70m.

More
On this story

RSA's Irish expansion runs out of luck
RSA boss faces questions over leadership

On this topic

European storm to cost insurers €1.4bn
Lombard RSA / Thomas Cook / bricks
RSA Irish chief resigns amid probe
Questions linger over regulation as RSA Ireland chief exits

IN Insurance

Regulators warn on insurance accounting
Ward joins Brit as owners eye exit
Prudential raises dividend expectations
Swiss Re hunt for Admin Re partner continues

The fresh losses in Ireland, along with net claims of £25m related to the storms in northern Europe earlier this month, would "lead to a further reduction in anticipated 2013 earnings", the FTSE 100 group said.

It added: "The impact of events in the last quarter will need to be taken into consideration when the board determines the 2013 final dividend recommendation in February 2014."

The shares opened down 20 per cent at 81p in early Friday trading.

Analysts at Oriel Securities said on Friday: "This is clearly a very disappointing announcement for the company leading to uncertainty about ongoing profitability, capital levels, dividends and strategy."

Simon Lee, the 52-year-old who has led the group since November 2011, had been under fire following the discovery of accounting irregularities at its Irish business.

Mr Lee, who will receive a year's salary of £824,000, is to leave the group with immediate effect and chairman Martin Scicluna will take on executive duties until a replacement is found.

Mr Scicluna attempted to reassure investors on a call with analysts following the latest announcement.

"We are confident this represents the full financial extent of the issues we've been facing in our Irish business," he said.

RSA said last month that it was conducting an investigation alongside regulators after it uncovered "issues" in the "claims and finance functions" of its Irish business, prompting the shares to fall 16 per cent.

Before today's announcement, analysts had been expecting the group to report pre-tax profit for the current financial year of £365m, compared with £479m last year.

Mr Lee had attracted shareholders' ire earlier in the year when RSA cut its annual payout by a third.

PwC is conducting a review of RSA's Irish operations and will report in the new year.

RSA said the process of replacing Mr Lee had started with the appointment of an executive search firm.

[envirovision] 13/12/2013 09:32

Do elephants bounce though? This can only drift lower for now I think, what a mess. How could anyone buy until a range of measures have been taken including guidance on capital raising. Jeez what a mess.

[p1nkfish] 13/12/2013 09:25

Until the following are clarified this is a falling knife imho:

1) Degree of divi cut
2) Plans for any capital raising, tapping of shareholders

How can you be sure what you are buying outside of an Insurance brand otherwise?
You might find yourself diluted.

PcW report will be important just in case they find "other" things elsewhere. Rarely does a single event happen. Might be endemic.

Dead cat bounce to follow no doubt then possible final leg down until uncertainties clarified.

Don't listen to me though.

[sleepy] 13/12/2013 09:22

Yes they do have an enviable market position in Ireland. But it has cost them a lot to achieve it

FBD seem to be able to run a satisfactory and profitable insurance business in Ireland

[portside1] 13/12/2013 09:10

added 40000 more A GIFT

[sr2day] 13/12/2013 09:00

will surely be savaged by weekend press.if thinking of buying wait till next week.

[warranty] 13/12/2013 08:59

In this morning, will increase if falls lower. Absolute no brainer either way.

[simon templar qc] 13/12/2013 08:58

What good timing Friday the 13th unluckily for some.

[topvest] 13/12/2013 08:57

I can see a third profit warning, new dividend strategy (i.e. cut) and rights issue with the annual results. Only problem is whether they can do a fund raising without a CEO. Think this is probably largely in the price. Will await a new dawn here.

[montyhedge] 13/12/2013 08:55

Great brands, poor CEO. Oversold.

[topvest] 13/12/2013 08:53

Well they are certainly "wide-open" to a bid from another insurance company at a £1 or so now. No CEO. Possible fund raising. Good company, poorly managed. It would all play to "no-realistic defence". Does anyone think any insurance companies might be interested?

[portside1] 13/12/2013 08:51

the yanks are coming

[portside1] 13/12/2013 08:51

take over on the cards a bid is coming that is why I have bought
it is what they are going to bid ?

[salpara111] 13/12/2013 08:48

Well that was pretty horrible, they need to pump £200M cash into Ireland and given the size of the Irish business suggests that financial controls were non existent.
I would agree that until a new CEO has had the chance to "kitchen sink" anything he can get his hands on in order to give himself the best start there is little point in being invested.
There is a real possibility that the divi could be passed completely.
Doubtless will be some fluctuation around this level but no real need to rush in at present.

[portside1] 13/12/2013 08:45

gift bought this morning waited for 83p thank you now looking to go back up to over 100p by jan

[hernando2] 13/12/2013 08:42

there will be a major review with a series of top range consultancies participating, this will issue a strategic plan to drive the business forward.

probably published in 2nd half of 2014.

Short term all driven by numbers, so loss of market share a given IMO

the thing will lurch along for a good while yet

[sr2day] 13/12/2013 08:39

will close below 80p.support is at 78p.if this goes,then do.n,t know

[hatter2] 13/12/2013 08:37

I feel sorry for private investors who held on when for me the writing was on the wall. I have made very good returns from RSA over the years; confident it will be back as a good business in the long term.

[rcturner2] 13/12/2013 08:37

Trouble is there are better options in the insurance market. Look at Catlin (CGL) for example.