We were encouraged by the positive statement as to the group’s expectations for 2011, assuming more normalised weather patterns. The reference to a combined ratio which may be “better than 95 per cent” is more positive than we have had from the group in the past.
FRANK BRADEN | S&P EQUITY RESEARCH
It is its job to take a certain amount of risk so when extreme conditions come up it is not unreasonable for it to experience a certain amount of loss. RSA has a well-diversified portfolio and we view it as a very stable company in a somewhat unstable market.
NICK JOHNSON | NUMIS SECURITIES
It is an abnormal loss given very abnormal weather patterns. The costs it has incurred have been relatively well contained and it is on track to make a profit. However, RSA's shares are currently trading close to the top of the recent range and we have downgraded it to ‘hold’.