RSA CEO Says He's Made Insurer Valuable for `Whoever Owns It'Sarah Jones
Shares climb as operating profit ahead of its expectations
Hester buys 480,000 pounds of shares in the U.K. company
RSA Insurance Group Plc Chief Executive Officer Stephen Hester says the company, which was the subject of an abandoned 5.6 billion-pound ($8.1 billion) takeover offer, is now much more valuable for any future owner.
The insurer reported on Thursday an 8 percent increase in written premiums for core business units in the first quarter and said operating profit was ahead of its expectations. Investments increased by 7 percent boosted by a weaker pound and the shares advanced in London.
“Since the opportunistic approach that we received last summer the shares” are recovering, Hester said on a call with journalists. “We are demonstrating that we are much more valuable for whoever owns it and we will behave in shareholders’ interests in whatever situation presents itself.”
Zurich Insurance Group AG’s approach in August was backed by both Hester and the board before the Swiss company was forced to walk away after losses at its own general insurance unit. The takeover would have capped a tumultuous two-year period for the British insurer that has involved an accounting scandal and a spate of asset disposals.
RSA was up 2.4 percent to 480.7 pence in London trading, extending its gains this year to 13 percent. The insurer is still down 7 percent from its high on August 4. Hester acquired about 480,000 pounds worth of shares in the company, RSA said in a separate statement.
Hester said RSA’s turnaround was complete, with the cost-cutting program ahead of schedule and the disposal of its Latin America business expected to be finalized in the first half. That leaves the Middle East unit as the insurer’s last non-core business for which there is currently no buyer, the CEO said on the call. Fosun International Ltd. was said to be in advanced talks to acquire the business in September.
“This company can prosper for many decades to come independently,” Hester said. “Our day job is about making this company perform as well as it possibly can, blind to ownership.”