A third profit warning possible by year end
Analysts have downgraded their recommendations of RSA after it announced its second profit warning in less than a week.
RSA suspended three of its top management team in Ireland on Friday and has had to inject capital to boost its solvency ratio.
Panmure Gordon maintained its “sell” recommendation and cut its target price to 98p per share from 117p.
Analyst Barrie Cornes said: “Despite management reassurances late yesterday, we think that the dividend is under threat as a result of these profit warnings and a possible further one by year end.”
Shore Capital’s Eamonn Flanagan moved from a “buy” to “hold” recommendation.
“The words ‘reserving issues’ and ‘claims issues’ strike fear into the hearts of management, investors and regulators of insurance companies … and not without good reason,” he said.
“Although extremely damaging for the group’s reputation and credibility in Ireland, these issues are unlikely to topple the group.”