I look at the developments since Hester took over and wonder about his end game. On the one hand he is cleaning up many issues such as capital and the cost base. On the other hand he is creating a sub scale international insurer with four distinct and largely unrelated operations (UK/Ireland, Scandi, Canada, Latin America). Unfortunately only Scandi looks to have the one feature which can overcome lack of scale, superior underwriting skills. To this can be added some remaining problems hinted at in the results, most specifically questions about the strength of reserves. A statement that they retain a 5% margin is barely consistent with 2014 movements and setting a future expectation of 1% prior year releases in future. At best it suggest reserves are just adequate but not comparable in strength with major competitors. So what else can he do? The obvious way of realising shareholder value would be to put the core businesses on the block and break up RSA. Scandi would fetch a decent price as a major player in a consistently profitable market. The UK and Canada would be attractive to other majors looking to build scale in those markets and Latin America is flavour of the month for the likes of Allianz. I would not hesitate to get into RSA if I thought Hester was open to all options to maximise shareholder value. At the moment I lack that confidence. He seems to believe you can be a sub scale player long term.
How very very nice to hear from my favourite Scottish wee prickly thing, long time no speak. Hope all is well and that you portfolio is positively blooming now that the FTSE has decided to reach record highs and test 7,000 after being in the doldrums for 15 years!!!!! ATB.
my 'waiting for a miracle' drawer has collapsed under the weight! lol.that many lost count, feels more like dead and buried The drop brought me here! But after reading your post not for me at this time. ATB
I feel your pain. This has been a poorly performing share over the years but as I own so few they have been consigned to my 'waiting for a miracle' drawer. Doubt they will ever return to their all-time of 628p in 03/99 - which with the 1 for 5 consolidation would now be £31.40!!!! But with a return to profit and the re-instatement of a 2p Final div you may be back in profit one day soon. ATB.
Return to profit, reinstatement of the dividend, and the share price drops near 5% Oh well, as I'm averaged at circa £5, won't be going anywhere for a while yet. As ever, GLA and DYOR
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