LSE:RSA

Stock Analysis Report

Executive Summary

RSA Insurance Group plc, together with its subsidiaries, provides personal and commercial general insurance products.

Rewards

Trading at 43.6% below its fair value

Earnings are forecast to grow 15.42% per year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Fair value second-rate dividend payer.


Similar Companies

Share Price & News

How has RSA Insurance Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RSA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.4%

RSA

-1.8%

GB Insurance

-0.8%

GB Market


1 Year Return

7.5%

RSA

2.0%

GB Insurance

8.5%

GB Market

Return vs Industry: RSA exceeded the UK Insurance industry which returned 2% over the past year.

Return vs Market: RSA matched the UK Market which returned 8.5% over the past year.


Shareholder returns

RSAIndustryMarket
7 Day-1.4%-1.8%-0.8%
30 Day2.1%-1.6%-0.6%
90 Day4.0%3.1%1.5%
1 Year12.0%7.5%13.4%2.0%14.1%8.5%
3 Year8.1%-2.4%12.1%-8.0%19.2%4.0%
5 Year45.8%26.8%36.2%1.2%41.8%9.5%

Price Volatility Vs. Market

How volatile is RSA Insurance Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is RSA Insurance Group undervalued compared to its fair value and its price relative to the market?

43.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RSA (£5.44) is trading below our estimate of fair value (£9.64)

Significantly Below Fair Value: RSA is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RSA is poor value based on its PE Ratio (21.4x) compared to the Insurance industry average (12.9x).

PE vs Market: RSA is poor value based on its PE Ratio (21.4x) compared to the UK market (17.3x).


Price to Earnings Growth Ratio

PEG Ratio: RSA is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: RSA is good value based on its PB Ratio (1.4x) compared to the GB Insurance industry average (1.7x).


Next Steps

Future Growth

How is RSA Insurance Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

15.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RSA's forecast earnings growth (15.4% per year) is above the savings rate (0.5%).

Earnings vs Market: RSA's earnings (15.4% per year) are forecast to grow faster than the UK market (12.4% per year).

High Growth Earnings: RSA's earnings are forecast to grow, but not significantly.

Revenue vs Market: RSA's revenue (1.7% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: RSA's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RSA's Return on Equity is forecast to be low in 3 years time (13.8%).


Next Steps

Past Performance

How has RSA Insurance Group performed over the past 5 years?

62.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RSA has high quality earnings.

Growing Profit Margin: RSA's current net profit margins (3.7%) are lower than last year (4.3%).


Past Earnings Growth Analysis

Earnings Trend: RSA has become profitable over the past 5 years, growing earnings by 62.1% per year.

Accelerating Growth: RSA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: RSA had negative earnings growth (-14.1%) over the past year, making it difficult to compare to the Insurance industry average (21.9%).


Return on Equity

High ROE: RSA's Return on Equity (7.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is RSA Insurance Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: RSA has a low level of unsold assets or inventory.

Debt Coverage by Assets: RSA's debt is covered by short term assets (assets are 12.9x debt).


Financial Institutions Analysis

Asset Level: RSA's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if RSA has a sufficient allowance for bad loans.

Low Risk Liabilities: RSA reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if RSA has an acceptable proportion of non-loan assets held.

Low Risk Deposits: RSA has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if RSA has an appropriate level of bad loans.


Next Steps

Dividend

What is RSA Insurance Group's current dividend yield, its reliability and sustainability?

3.86%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.0%markettop25%5.3%industryaverage5.2%forecastin3Years5.3%

Current dividend yield vs market & industry

Notable Dividend: RSA's dividend (3.86%) is higher than the bottom 25% of dividend payers in the UK market (1.96%).

High Dividend: RSA's dividend (3.86%) is low compared to the top 25% of dividend payers in the UK market (5.25%).


Stability and Growth of Payments

Stable Dividend: RSA's dividend payments have been volatile in the past 10 years.

Growing Dividend: RSA's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (83.5%), RSA's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RSA's dividends in 3 years are forecast to be covered by earnings (64.4% payout ratio).


Next Steps

Management

What is the CEO of RSA Insurance Group's salary, the management and board of directors tenure and is there insider trading?

2.0yrs

Average management tenure


CEO

Stephen A. Hester (58yo)

5.8yrs

Tenure

UK£4,068,000

Compensation

Mr. Stephen A. M. Hester has been the Group Chief Executive Officer of RSA Insurance Group plc since February 05, 2014. Mr. Hester has over 30 years' experience in financial services and FTSE100 companies  ...


CEO Compensation Analysis

Compensation vs Market: Stephen A.'s total compensation ($USD5.33M) is above average for companies of similar size in the UK market ($USD3.54M).

Compensation vs Earnings: Stephen A.'s compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.0yrs

Average Tenure

50.5yo

Average Age

Experienced Management: RSA's management team is considered experienced (2 years average tenure).


Board Age and Tenure

5.0yrs

Average Tenure

57.5yo

Average Age

Experienced Board: RSA's board of directors are considered experienced (5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Stephen A. Hester (58yo)

    Group Chief Executive & Director

    • Tenure: 5.8yrs
    • Compensation: UK£4.07m
  • Karen Caddick (50yo)

    Group HR Director

    • Tenure: 0.6yrs
  • Charlotte Heiss

    Group Chief Legal Officer & Company Secretary

    • Tenure: 3.8yrs
  • Scott Egan (48yo)

    Chief Executive of UK & International and Director

    • Tenure: 4.2yrs
    • Compensation: UK£1.96m
  • Ken Norgrove

    Chief Executive Officer of RSA Group Scandinavian Business

    • Tenure: 0.9yrs
  • Natalie Whitty

    Communications Director

    • Tenure: 0yrs
  • David Coughlan

    Managing Director - UK Personal Lines

    • Tenure: 3.6yrs
  • Charlotte Jones (51yo)

    Group CFO & Executive Director

    • Tenure: 1.7yrs
    • Compensation: UK£56.00k
  • David Germain

    Group Chief Technology Officer

    • Tenure: 3.1yrs
  • Kerry McConnell

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Sonia Baxendale (57yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
  • Stephen A. Hester (58yo)

    Group Chief Executive & Director

    • Tenure: 5.8yrs
    • Compensation: UK£4.07m
  • Enrico Tommaso Cucchiani (69yo)

    Independent Non-Executive Director

    • Tenure: 5yrs
    • Compensation: UK£85.00k
  • Martin Strobel (53yo)

    Senior Independent Director

    • Tenure: 0.3yrs
    • Compensation: UK£110.00k
  • Martin Scicluna (69yo)

    Chairman of the Board

    • Tenure: 6.9yrs
    • Compensation: UK£427.00k
  • Scott Egan (48yo)

    Chief Executive of UK & International and Director

    • Tenure: 4.2yrs
    • Compensation: UK£1.96m
  • Alastair William Barbour (66yo)

    Independent Non-Executive Director

    • Tenure: 8.2yrs
    • Compensation: UK£115.00k
  • Charlotte Jones (51yo)

    Group CFO & Executive Director

    • Tenure: 1.7yrs
    • Compensation: UK£56.00k
  • Kath Cates

    Independent Non-Executive Director

    • Tenure: 6.3yrs

Company Information

RSA Insurance Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: RSA Insurance Group plc
  • Ticker: RSA
  • Exchange: LSE
  • Founded: 1706
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: UK£5.537b
  • Shares outstanding: 1.03b
  • Website: https://www.rsagroup.com

Number of Employees


Location

  • RSA Insurance Group plc
  • 20 Fenchurch Street
  • London
  • Greater London
  • EC3M 3AU
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RSAI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
RSALSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
SUA2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
RSALBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
RSNA.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDOct 2008

Biography

RSA Insurance Group plc, together with its subsidiaries, provides personal and commercial general insurance products. It operates through Scandinavia, Canada, and UK & International segments. The company o ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/06 20:40
End of Day Share Price2019/12/06 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.