RSA shares fall in wake of post storm profit warning

Shares in insurance group RSA have fallen by nearly six per cent after warning of lower profits in the wake of the St Jude storm, as well as flooding in Canada.

The group now expects return on equity for 2013 to be below 10 per cent and payouts to be "materially above assumption."

Simon Lee, group chief executive, commented:

2013 is proving to be an exceptionally tough year for weather events for the Group. Over the summer we saw the worst and the third worst natural catastrophe insurance events on record in Canada, followed by continued adverse weather across the country during the third quarter. More recently, Northern Europe suffered a severe windstorm on 27 and 28 October. Our priority has been to provide the support our customers need to get back on track as quickly as possible.

Assuming there are no more major weather events in 2013, RSA expects the impact of adverse weather will be 1.5 percentage points above their planning assumptions. Due to the damage caused by St Jude the insurance industry across Europe is set pay out £1.1bn according to broker Willis Re.