Michael Faulkner takes a look at this week's stocks
It was a bad week for insurance stocks. The FTSE 100 took a battering and many insurance stocks failed to weather the storm. Brit and Aviva were down 10% for the week, while Admiral saw its share price fall by over 6%. Amlin, Novae, RSA and Hiscox also saw their stocks tumble.
Lloyd’s insurer Beazley bucked the trend, its stock rising over 18% during the week in the commencement of a £20m share buy-back.
Motor specialist Highway and Culver also climbed, the latter’s share price continuing its ascent after the troubled broker sold its retail arm to Protectagroup. Highway’s shares climbed over 4%, while Welsh broker Culver’s stock rose 2.15%.
Lloyd’s insurer Chaucer saw its shares slump despite the sale of its stake in managing agent Pembroke to Bermuda insurer Ironshore for £14.9m. The deal, which is expected to generate a profit of £7m net of goodwill, gives Ironshore an entry into Lloyd’s.
Analyst Numis said the sale represented tangible evidence that Chaucer’s strategy of managing and investing in third-party syndicates could be value-enhancing. “We expect Chaucer’s shares, which have fallen on reduced investment earnings expectations, to show a small recovery on this news.”
Chaucer shares jumped over 3% on the news, before falling away. As Insurance Times went to press, Chaucer shares were trading at 80p, down 0.62% for the week.
On the AIM market, construction insurer Gable was the week’s star performer, with its stock rising over 7% for the week. Gable shares have tumbled over the last two years from a high of over 22p. The company, which began trading in 2005, turned a profit in 2007. Software house SSP’s stock has continued to enjoy a lift following the company’s admission two weeks ago that it was in sale talks with a potential bidder, thought to be a private equity house.
The stock has slumped slightly in the days following the disclosure of the talks but remain about 5% above its pre-discussions level. The SSP board’s expectations as to what is an acceptable sale price are seen as key to whether a deal is done. But some see a sale as the logical – and necessary – next step for the business.
SSP’s stock was trading at 157.50p as Insurance Times went to press, up 1.29% for the week.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
