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

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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.


justin tallis/Agence France-Presse/Getty Images

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
RSA,
+5.42%

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
HSX,
+16.14%
,
a component of the mid-cap FTSE 250
MCX,
+0.68%
,
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
UKX,
+1.29%

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
OCDO,
+9.46%

was another standout, rising 5% after reporting a boost in its U.K. venture from switching its grocery provide to Marks & Spencer
MKS,
+4.05%

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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