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Don’t panic if a third quarter trading update from FTSE 100 constituent RSA Insurance (RSA) on 2 November reveals chunky catastrophe losses.
The market has already been pricing in bad news, as reflected by share price weakness over the past few months.
The insurer issued a brief trading update on 25 September which said notified losses at the time were well below reinsurance limits.
Panmure Gordon analyst Barrie Cornes last week downgraded his 2017 earnings per share forecast by 12% to 41p. He says other analysts will have to cut their forecasts to avoid RSA having to issue a profit warning for 2017.
‘There is the possibility of a short term negative reaction to the share price in early November but we believe any impact would be relatively short lived,’ he says.
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