7th May 2015 06:49
LONDON (Alliance News) - RSA Insurance Group PLC Thursday cautioned that lower interest rates and currency moves in its vital areas of business are having an unwelcome effect on business, but the insurer said its net profit in the first quarter of 2015 was "a little ahead" of plans and included gains it is expecting to make on asset sales.
In a statement, RSA said net written premiums decreased to GBP1.59 billion in the three months ended March 31, compared with GBP1.73 billion in the corresponding period of the prior year. Excluding the group's new reinsurance coverage programme, discontinued and non-core operations, core group net written premium fell to GBP1.58 billion from GBP1.62 billion.
The insurer said the results of its UK business are gaining strength. Although the first three months of the year are seasonally weak for underwriting performance, trends were "consistent" with the group's targeted improvements against the prior year, according to RSA, although the insurer noted that results varied in different regions.
RSA said its investment performance remains on track to deliver around GBP380 million of income in 2015.
In addition, RSA said it has continued to cut costs and is making "good progress" against its targets.
First quarter profit included disposal gains of GBP109 million from the sales of its Hong Kong and Singapore insurance businesses, RSA said.
Chief Executive Stephen Hester, who is leading the group's turnaround following an accounting scandal in its Ireland operation late in 2013, said that progress was "encouraging" in the first quarter, as the insurer continued to sell non-core assets.
The CEO said that first-quarter operating profit and underwriting performance improved on the corresponding three months of the prior year.
"Our near-term ambition is to have substantially completed the strategic focus and capital elements of our restructuring plan as we go into next year; to deliver improved underlying results in 2015 and to be making good progress towards our medium term performance targets," Hester said.
"Lower interest rates and currency moves in our key territories continue to have adverse impacts, whilst insurance markets remain competitive. The path to high quality outperformance will not be smooth or easy, but our focus on that goal is clear," Hester said.
By Samuel Agini; [email protected]; @samuelagini
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