ii view: RSA leans on personal insurance

by Keith Bowman from interactive investor |

Insurer RSA is busy reviewing its commercial operations.

Half-year results

Adjusted operating profit up 1.3% to £308 million

Statutory pre-tax profit down 25% to £183 million

Interim dividend up 3% to 7.5p per share

Chief executive Stephen Hester said:

"RSA is reporting a solid first half 2019. Particularly pleasing is the improvement in current year underwriting results, which represent our best first half in the last 10 years. Our Personal Lines business continues to drive this performance.”

ii round-up:

With a history dating back over 300 years, property and casualty insurance company RSA Insurance Group (LSE:RSA), has over nine million customers located in over 100 countries. 

Group brands include MORE TH>N and 123.ie in the UK and Ireland, Trygg-Hansa in Sweden, Codan in Denmark and Norway and Johnson and RSA in Canada. It also underwrites home insurance for John Lewis and pet insurance for both Tesco and Argos. 

Losses and challenges in its commercial business, especially its London Market operations have been hindering performance. Partial business exits and a review of this part of the insurer have been occupying management. 

First-half results saw prior management actions beginning to come through.  Operating profit excluding business exits rose marginally. Personal lines business continued to drive progress, while the commercial business still needs more time to see results improve. 

The insurer’s combined ratio, a measure of underwriting profitability, in which a figure below 100% indicates a profit, improved slightly to 94.3% from 94.7%. 

ii view:

RSA remains in a period of transformation. Insurance market conditions are competitive and financial market conditions are volatile. 

For investors, a historic dividend yield of over 3.5% offers some appeal, with the forward price earnings ratio currently sat below the three-year average. Management is grappling with current group issues, but patience is likely to be required. 


  • Management action to improve performance
  • A historic dividend yield of over 3.5%, not guaranteed


  • Insurance market conditions remain competitive
  • Dividend cover of 1.6 times earnings down from a 3-year average of 2.1 times

The average rating of stock market analysts:


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Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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