RSA Drops 3% on Bad Weather

Before you go, we thought you'd like these...
Before you go close icon

LONDON -- RSAInsurance (ISE: RSA.L) dropped 3.5 pence, or 3%, to 105 pence this morning after updating shareholders about the cost of the U.K.'s recent poor weather.

The FTSE 100 (UKX) insurer revealed the net loss across the group's U.K. household, motor, and commercial property portfolios would be 40 million pounds following the wettest June on record. In addition, RSA admitted the impact of the continued rainfall during July would be 10 million pounds.

Today's statement also said two earthquakes in the Emilia-Romagna region of Italy during May would cost the group a further 35 million pounds.


Looking toward the rest of the year, and assuming "a more normal level of weather losses," RSA claimed its combined operating ratio for 2012 was now expected to be better than 96%.

Back in May, RSA had expected its combined operating ratio for 2012 to be better than 95%. A combined operating ratio is a measure of profitability for insurers. A ratio below 100% indicates the insurer is making an underwriting profit, while a ratio above 100% signals the company is paying more in claims than it collects in premiums. RSA's combined operating ratio of 2011 was 95%.

This morning's price reaction has put RSA's trailing dividend yield at 8.7%. It's very attractive, although the insurance industry is not really renowned for dependable payouts while most surprises in the sector tend not to be pleasant.

So if you are seeking more reliable FTSE 100 dividend shares, The Motley Fool has produced a special free report that could assist your investment decisions.

"8 Dividend Plays Held By Britain's Super Investor" reveals the favorite blue chip stocks held by Neil Woodford -- the City fund manager who has thrashed the FTSE 100 during the five, 10, and 15 years to 2011. Unlike RSA, many of Woodford's current selections have been hitting fresh 52-week highs of late.

The Fool's exclusive Neil Woodford report can be downloaded immediately. But hurry, the report is free for a limited time only.

Investing is by no means easy in today's uncertain economy. That's why we've published "Top Sectors for 2012" -- our guide to three favorable industries. This free report will be dispatched immediately to your inbox.

Further Motley Fool investment opportunities:

At the time this article was published Maynard does not own any share mentioned in this article. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners