5th Nov 2015 08:13
LONDON (Alliance News) - RSA Insurance Group PLC on Thursday said it enjoyed a good performance in the third quarter despite a "distraction" arising from takeover interest from Swiss insurer Zurich Insurance Group, which has since withdrawn from talks to buy its London-listed rival.
Chief Executive Stephen Hester said he has been pleased with the turnaround effort he has led at RSA since he was named as chief executive in February 2014 in the wake of an accounting scandal at its business in Ireland and heightened claims.
"If we can keep the improvements coming, the future is bright for RSA as a high quality, high performing leader in its markets," Hester said.
Despite the improvement he has overseen at RSA, Hester said that broader insurance markets remain challenging, while financial markets are volatile. "Within those constraints, RSA is making strong progress on the path to high quality and sustained business outperformance," Hester said.
RSA, which saw Zurich back away from a takeover offer in September due to tough conditions for the Swiss company's general insurance arm, said that trading in the third quarter was strong and ahead of its expectations.
"In the discrete third quarter, the underwriting performance in the UK, Canada and Scandinavia was ahead of the same period last year and ahead of our plan," RSA said.
The insurer said that, at the end of the third quarter, it saw positive prior year emergence overall, and particularly in Canada, putting it on track to generate profit in 2015 in line with its guidance of between zero and 1.0% of premiums. In addition, RSA said that expenses have continued to fall.
"We target continuing improvements to underwriting profitability in the remainder of the year, though results overall will be subject to weather/large loss volatility and prior year reserve movements," RSA said.
The insurer said that its investment should produce about GBP390.0 million of income in 2015.
Meanwhile, year-to-date net attributable profits are ahead of RSA's plans, the company said, with third-quarter profit including GBP21.0 million in disposal gains from the sale of its Indian associate, bringing total disposal gains for the year-to-date to GBP153.0 million.
Net written premiums fell to GBP5.09 billion in the first nine months of 2015 from GBP5.59 billion in the corresponding period the prior year, although the fall would have been less pronounced, at 3%, had currency exchange rates remained constant following growth in Scandinavia, UK and Ireland offsetting a fall in Canada.
Year-to-date underlying premium income was up 1% against the prior year, RSA said, with continuing improvement in cost and attritional ratios.
Shares in RSA were up 2.3% at 424.60 pence on Thursday morning shortly after trading began, one of the best performers in the FTSE 100.
By Samuel Agini; [email protected]; @samuelagini
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