Rsa Insurance Group Ld Share Discussion Threads

[cc2014] 07/5/2015 11:54

News flow good today and price up on a horrible day on FTSE. What's not to smile about?

[loganair] 05/5/2015 11:08

The head of RSA Insurance, Stephen Hester, must be one of the few people in the City who dreads the arrival of bonus season.

Having had to turn down lucrative pay-outs while at the state-owned Royal Bank of Scotland, he is facing a shareholder revolt at the annual meeting on Friday over a long-term share award worth three times his £950,000 basic salary.

Before that, RSA will report first-quarter results which are expected to have been boosted by benign winter weather in the UK and Scandinavia.

According to Panmure Gordon, net written premiums are expected to have fallen 15 per cent to £1.68bn because of disposals.

[loganair] 24/4/2015 14:32

sponges - Not the point I was making. As an Insurer, RSA is forced by the British Government to Buy and hold UK treasuries which is helping to keep the Interest rate down on Government debt and means each year RSA is getting less and less interest on it's treasuries they hold as each year when they are forced to re-new any treasuries that mature they're having to buy at a higher and higher price and getting lower and lower interest.

If RSA were not forced by the British Government to buy British Government debt then they would be able to seek out better investments paying a higher interest, which would mean an increase in their profits and higher dividends for RSA share holders.

And YES I agree, RSA could also be making higher profits on what they Insure as they are currently only making 1.2% on the premiums they charge when they use to make around 4%.

[lefrene] 23/4/2015 20:41

And as interest rates must rise at some point, those bonds will plunge in value. I suspect that the government plan is to repay public debt by raising interest rates, thus making it possible to buy in cheap low yield bonds at way below face value, and cancel them.

[jimcar] 23/4/2015 19:40

True but the point about low interest rates on the funds it has in its coffers whilst waiting for claims to come in still holds. This used to be its main source of profits

[sponges] 23/4/2015 18:53

RSA is not a life insurer it is a General insurer ?

[loganair] 20/4/2015 14:54

The big problem with RSA as with other insurers is that the Government are forcing these companies to hold government bonds that are paying virtually no interest - RSA is a forced holder of government bonds which is good for the government as it is holding the interest rate down and meaning there is a forced ready market to buy these virtually worthless government bonds.

[ncnd] 20/4/2015 10:55

I keep hearing positive comments about RSA and how the longer term holding will benefit the current doubters.

[loganair] 14/4/2015 10:29

RSA - Over the last year, RSA has underperformed the FTSE 100 by a not inconsiderable 12%. That’s because the insurer continues to undergo a major transition that is seeing it improve efficiencies and rationalise its business following a challenging period that included two years of losses and an accounting scandal.

And, while profitability is set to return this year, RSA is expected to increase its bottom line by a rather lowly 4% next year. That’s behind the FTSE 100’s growth rate but, with RSA trading on a P/E ratio of just 13.8 (versus 16 for the FTSE 100), there is considerable scope for an upward rerating over the medium term, with the catalyst being improved financial performance as the company re-emerges under a new management team.

[loganair] 04/4/2015 14:18

It seems to me that RSA desperately need to find another source of income from their capital held other than in Treasuries and Government bonds, interpreting the current rules and regulations in the best interest of RSA, as each year they're yielding around 0.3% less in interest than the year before and most of us are well aware there is a huge inflated bubble in bond prices which one day will burst and will cost RSA 'a bucket load of money' will be highly destructive to RSA and it's, our wealth.

[loganair] 04/4/2015 14:09

The news that RSA is believed to have put its Latin American (LatAm) business up for sale which includes units in Argentina, Chile, Brazil, Mexico, Colombia and Uruguay

RSA is believed to have appointed Goldman Sachs to sell the circa £500mn ($739mn) LatAm business.

RSA has also appointed UBS to sell its Middle Eastern business, it is understood.

Sources said that a teaser note has been circulated to potential acquirers and that work is underway on a full sale memorandum for RSA's Latin American arm.

Many of the world's largest insurers could be tempted by RSA's Latin American operations, which saw premium income rise 4% last year on a constant currency basis to 690mn pounds (US$1,017), versus an 8% fall at the group as a whole.

FX movements had a big impact on premiums, however, which were down 18% in Latin America at reported exchange rates, RSA said in its 2014 results release.

Premiums were up 32% in Argentina because of high inflation and up 15% in Uruguay. In Brazil, premiums rose 2% in a competitive market, while Chilean premiums were flat, partly because of market softness.

"In Latin America the markets we operate in continue to be attractive on a fundamental basis, though competitive, driven by low insurance penetration and a growing middle class across the region," the group said.

"Given the softer economic outlook, we anticipate growth continuing at a more subdued pace than historical levels, with improving profitability targeted," it added.

Ben Cohen, analyst at Canaccord Genuity said, strategically, a sale would leave RSA with a reliance on very mature markets, "which is not a problem as long as you do it well" he said, citing the example of Direct Line.

Cohen said the deal would likely be at a healthy premium to its book value and the best scenario would be if cash was returned to shareholders, although the firm had not flagged any impending windfall and proceeds could be used to build RSA's capital position, which came out weaker than expected at results.

[loganair] 04/4/2015 13:47

UK-based insurer, RSA Insurance Group, has finalised a deal to sell its Singapore and Hong Kong branches to a global provider for £130m ($193m, €179m to Swiss-based insurer, Allied World Assurance.

RSA’s Singapore business was sold for £93m and the Honk Kong branch for £37m.

Last month, it announced it was selling its stake in Indian insurer, Royal Sundaram Alliance Insurance Company.

Hester said: “The clean-up of past weaknesses was also expensive. Market headwinds, especially from exchange rate changes and low interest rates, are a drag on results.

[tfergi] 13/3/2015 08:08

Looks way oversold to me now. Medium to long term prospects much better !

[cc2014] 10/3/2015 19:47

Bought some more today right at the bottom of the day. We shall see

[chancer] 10/3/2015 10:13

Or get out before the piranha effect eats away at all your holdings, as already has happened. 80p real term price but heading for 56p x 5 =280

[farmsted] 10/3/2015 09:36

Third bottom 400 which it should reach this week, is it becoming a good time to add more ?

[optomistic] 06/3/2015 16:07

Double bottom @ 420...Not always reliable as an indicator, let's see if it will mean anything this time.

[optomistic] 05/3/2015 17:47

chancer, thanks for posting about the x/d being today, I had missed that.
Makes the day look a little better but it was a big drop this morning for the 2p divi.

Payment day 1st Apr

[cc2014] 05/3/2015 13:23

Couldn't resist any longer and bought a few this morning. Fingers crossed

[optomistic] 05/3/2015 10:47

hanse495...my optimism here has waned somewhat, but at such a price we can only hope that the next move will be up.

[hanse495] 05/3/2015 10:43

At least you're optimistic