Positive vibes for R&SA

Royal & SunAlliance (R&SA) was chased to a fresh year high this week as two stockbrokers published upbeat notes on the insurer in as many days.

On Monday, Smith Barney hiked its R&SA target price from 70p to 82p following last week's interim results. It said the figures were "sound" in all "core" regions, with underwriting profit slightly ahead of expectations.

On Tuesday, Goldman Sachs echoed the positive sentiment. Raising its 2005 earnings per share forecast from 9.96p to 15.89p, it argued that the benign claims environment, positive macro factors and the management restructure of the UK pension fund has given the stock momentum.

R&SA was trading at around 96p as Insurance Times went to press.

Analysts also chewed over Aviva's first half figures, with Keefe, Bruyette & Woods saying the group's results justified a relative re-rating of the shares.

In his equity research note, analyst Greig Paterson slapped a 780p price target and outperform rating on the insurer, which is currently trading at around 635p a share.

"We believe the company offers value relative to the peer group," he said. "The group's strong cashflow position raises the prospect of a dividend policy upgrade at year-end."

' Yvette Essen is stock market reporter and insurance correspondent for The Daily Telegraph