5th Nov 2013 09:11
LONDON (Alliance News) - FTSE 100 insurers RSA Insurance Group PLC and Legal & General Group PLC Tuesday reported contrasting fortunes in their third quarter interim management statements.
RSA Insurance Group PLC warned that it expects its full-year weather losses to be "materially above planning assumptions", as it felt the the force of severe weather in Europe, Scandinavia and the worst Canadian natural catastrophe on record in the case of the Alberta floods. Return on equity for the full year is expected to come in at under 10% as a result.
On a more-positive note, the general insurer said net written premiums were up 7%, at constant exchange rates, to GBP6.7 billion in the three months ended September 30, buoyed by a 14% increase, again at constant exchange rates, in net written premiums in Canada and a 17% increase in emerging markets, where the group wrote GBP1.03 billion in net premiums.
RSA Insurance's investment portfolio was broadly stable but still saw a 0.5% decline in its value since June 30, falling to GBP14.20 billion, primarily because of adverse foreign exchange movements, it said. Expected investment income for the full year remains comfortably on track, with RSA expecting approximately GBP470 million.
Life insurer Legal & General, on the other hand, was optimistic on its trading outlook, as its net cash generation over the third quarter to September 30 grew to GBP740 million, compared with GBP616 million for the corresponding quarter in 2012.
Legal & General's investment management arm had a particularly successful quarter, with net inflows at GBP3.1 billion versus GBP200 million in net outflows in the year-earlier period. Total assets under management rose to GBP443 billion at the end of the third quarter from the GBP433 billion reported at the end of the half year.
One common area of success for both insurers was in premium growth, as Legal & General said its total gross written premiums increased to GBP632 million in the third quarter, up from GBP581 million in the corresponding quarter in 2012.
Legal & General has benefited from its recent spate of bolt-on acquisitions, including annuity firm Lucida in June. It said annuity sales nearly tripled to GBP2.3 billion in the third quarter from GBP800 million for the corresponding quarter in 2012.
"Another strong quarter for Legal & General with gross inflows and premiums well ahead of 2012," Chief Executive Nigel Wilson said in a statement. "All divisions contributed to our broad-based growth. We are executing well and at pace; four acquisitions have been successfully completed and net cash is up 20%."
Both FTSE 100 insurers saw their shares decline following the results announcements, with Legal & General down 1.6% to 214.50 pence, and RSA Insurance down 5.3%, to 122.30 pence.
By Samuel Agini; [email protected]; @samuelagini
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