27th Feb 2020 09:02
(Alliance News) - RSA Insurance Group PLC on Thursday reported a mixed 2019 performance, with profit coming in above market expectations, despite a fall in net written premiums.
The general insurer's net written premiums for 2019 declined by 1.1% to GBP6.40 billion from GBP6.47 billion, coming in below the analyst consensus forecast of GBP6.46 billion.
RSA Insurance's net written premiums were up 1% in Scandinavia and 3% in Canada, however the UK & International unit reported a 7% drop due to underwriting and rating actions taking effect.
Pretax profit for the year increased by 15% to GBP551 million from GBP480 million, and well above consensus forecasts of GBP506 million.
In addition, operating profit rose by 27% to GBP656 million from GBP517 million, also well above analyst expectations of GBP644 million.
RSA's underwriting profit increased by 62% to GBP405 million from GBP250 million, in line with expectations.
The group's combined ratio, a measure of underwriting profitability declined to 93.6% from 96.2% year-on-year, falling behind consensus expectations of 93.7%. A combined ratio below 100% indicates profitable underwriting.
RSA's Scandinavian unit posted a combined ratio of 87.4%, while the Canadian business recorded 94.5% and UK & International 95.0%.
RSA declared a final dividend of 15.6 pence per share, brining the total dividend for 2019 to 23.1p, up 10% from 21.0p the year before.
Looking ahead, RSA said it is targeting further progress in 2020, expecting investment income to be between GBP255 million to GBP270 million for the year, and net written premiums for 2020 to be similar to that in 2019.
Investment income for 2019 was GBP263 million down 4.4% from GBP275 million in 2018.
"2019 was an important period for RSA. Significant management renewal and a repositioning of our UK & International division are showing good promise. Our group-wide focus on underwriting improvement with strong cost control proved effective. Yet there is plenty more we can do to improve each of our businesses for customers and shareholders. There are challenges, but we are determined to drive further progress and high performance," said Chief Executive Stephen Hester.
Shares in RSA Insurance were up 1.9% at 542.20 pence on Thursday in London.
By Dayo Laniyan; [email protected]
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