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RSA Insurance and Hiscox rally after court ruling on business interruption cases – MarketWatch


Fixes the description of which side the FCA was on in the high court case.

Commuters walk across London Bridge toward the City of London on September 15, 2020.

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RSA Insurance was the standout U.K. blue chip stock on Tuesday, as the insurer said a higher court ruling on business interruption insurance was favorable enough for it to resume paying dividends.

RSA Insurance

shares rose as much as 6% as the insurer estimated the additional financial impact of Tuesday’s judgement to be approximately £104 million on a gross basis across its portfolio of relevant business interruption policies. After the application of its catastrophe reinsurance protection, RSA estimates the impact of this judgement to be around £85 million, and that number will reduce further because the loss will be covered by the group-wide aggregate reinsurance program.

Third quarter trading across the RSA Group to date has been strong, the insurer added. The interim dividend will be 8 pence, up from 7.5 pence last year.

The case was brought by the U.K. Financial Conduct Authority, on behalf of the policyholders. Hiscox
a component of the mid-cap FTSE 250
shot up 16% as it estimated additional COVID-19 claims arising from business interruption to be less than £100 million net of reinsurance.

The FTSE 100

overall rose 1.2%, as the market warmed to another strong showing on Wall Street, as well as upbeat economic data out of China.

Ocado Group

was another standout, rising 5% after reporting a boost in its U.K. venture from switching its grocery provide to Marks & Spencer

from Waitrose. Demand for the new range is driving both an increase in the number of products in customer baskets and strong forward demand, Ocado said.

Ocado expects a full year EBITDA of at least £40 million, which was ahead of the FactSet-compiled estimate for £28 million.

Watches of Switzerland slumped after Apollo Global Management sold a 33 million share stake at a 7% discount to Monday’s close. Apollo still has a 28% stake in the retailer.

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