25th Feb 2016 08:01
LONDON (Alliance News) - RSA Insurance Group PLC on Thursday reported a 43% jump in annual operating profit, beating analyst expectations, and raised its full-year dividend to 10.5 pence from 2.0p the prior year.
Operating profit before tax rose to GBP523 million in 2015, the London-listed insurer said, up from GBP365 million at actual exchange rates and from GBP334 million at constant currency. Analysts had expected operating profit of GBP481.0 million for the year, according to company-compiled consensus estimates.
Annual net written premiums for the core group, excluding discontinued and non-core operations, amounted to GBP5.72 billion in 2015, down from GBP6.09 billion at actual currency rates and slightly lower than the GBP5.75 billion constant currency comparative.
"RSA is now a strong and focused international insurer with leadership positions in the UK, Scandinavia and Canada. The group's strategic restructuring will complete in 2016 as remaining contracted disposals close," Chief Executive Stephen Hester said.
Hester increased the group's annual gross cost savings target to more than GBP350.0 million by 2018. Against its target of greater than GBP250 million annual gross cost reduction by 2017, the insurer delivered GBP180 million at the end of 2015 and now expects to achieve in the region of GBP250 million by 2016.
In addition, the insurer lifted its expectations for underlying return on tangible equity to the "upper half" of its 12-15% target range by 2017, with further improvements to follow.
"We see 2016 as the last major restructuring year with disposals and balance sheet work completing and the heavy lifting of core business improvement and cost reduction action continuing. We expect challenging markets and to rely on self-help to progress. Despite these headwinds we face the future with determination and confidence," Hester said.
By Samuel Agini; [email protected]; @samuelagini
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