RSA shares jump after dividend is hiked

City A.M. Reporter
RSA INSURANCE Group yesterday raised its mid-year dividend, predicting further sales growth in the coming months and shrugging off flat first half profit dented by the cost of Chile’s earthquake and bad weather in Europe.

“In terms of top line, we expect the UK to remain in positive territory for the remainder of 2010; international to deliver mid-single digit growth; and emerging markets to return to double digit growth in 2011 and be close to achieving this in 2010,” the company said in a statement to the London Stock Exchange.

The company said it expected to deliver a combined operating ratio (COR) for the full-year of 95 per cent, up from 94.8 per cent at the end of the first half and 93.5 per cent a year earlier.

RSA also said investment income and total gains should be marginally ahead of the £540m guidance originally given to the market and in line with 2009 levels.

“We expect to maintain top line momentum in the second half,” said chief executive Andy Haste.

He added: “This positive outlook is reflected in the seven per cent increase in the interim dividend.”

RSA said first half net written premiums had risen nine per cent to £3.8bn but that its underwriting result fell 26 per cent to £136m as a result of the earthquake and weather-related losses.

Adjusted pre-tax profit was £302m, little changed on the £301m reported a year ago.
Shares in the company closed up five per cent at 133.5p.