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.