Motor, home and marine insurer RSA's (RSA) 5% revenue increase in the first quarter has failed to impress the market. Management hoped a good start to the year could restore confidence in the FTSE 100 stock after it cut its dividend by a third in February.
However, its shares moved only 0.9% to 112p after its net written premiums reached £2.3 billion during the period, up from £2.2 billion a year earlier.
RSA slashed its final dividend for 2012 in its first such cut in a decade. It led to the insurer losing £700 million from its market cap. The timing could not have been worse as chief executive Simon Lee received a £480,000 cash bonus less than 18 months after joining the group.
Management blamed the need to hoard cash on weak investment returns, floods in the UK and an earthquake in Italy.
Its growth in the opening three months of the year was driven by an 18% jump in Canadian sales and a 16% rise in its emerging market revenues. This helped offset a flat performance in the UK and Western Europe, which grew by 1%.
The group’s growth was driven by its acquisitions. Its Canadian business achieved organic growth of 7% and benefited from L’Union Canadienne joining the portfolio. In the emerging markets operations were boosted by acquisitions in Argentina and good performances in Asia, Central and Eastern Europe and the Middle East.