Stockwatch

The week's winners
Royal & SunAlliance up 21.6%
Allianz up 16.2%

The week's losers
Zurich Financial Services down 21.9%
Cox down 9.7%

Royal & SunAlliance (R&SA) is back among the winners after a long absence.

But the recent spurt in the stock's fortunes don't follow the release of good business results.

Rather, speculation has been swirling once again around the group's plans to raise capital.

Reports suggest the troubled insurer was planning to split itself up and sell itself off instead of launching a rights issue.

Other sources suggest that lending giant Halifax could be sniffing around the R&SA stable for something that might complement its business.

Goldman Sachs welcomed the reports which injected a bit of life back into the share. It climbed towards 120p over the last ten days, from the doldrums of less than 90p where it had been slumping for too long.

Meanwhile, the group is trying to reassure brokers over next year's price rises.

Increases of 10% for property damage and 15% for public liability are being floated as likely figures for what corporate business director Brendan McManus calls "good quality middle market business".

McManus said that brokers could expect premiums for such business to be in line with claims inflation. He strenuously denied that R&SA was planning to make its rates attractive in order to retain business.

"There is absolutely no intention of us softening our position on rates at all," he said.

"We always said we would move our rates to what we consider to be our technical rate and after that, changes will be in line with what happens in the market.

"Claims inflation is about 10% on property. Any increases we apply next year on good quality business, where the loss ratio hasn't deteriorated, will be in line with that."

The figures were an indication of intention, rather than a guarantee, and the company had not finalised its reinsurance, leaving an important cost uncertain.