1st Aug 2019 09:34
(Alliance News) - RSA Insurance Group PLC on Thursday reported a fall in profit and premiums in the first half amid a "competitive" insurance market.
In the six months to June 30, the general insurer's pretax profit dropped 23% to GBP227 million from GBP296 million a year before.
RSA's gross written premiums slipped 1.3% to GBP3.90 billion compared to GBP3.95 billion a year before. The insurer's net written premiums, however, edged slightly higher to GBP3.25 billion.
RSA's Scandinavia and Canada businesses achieved 2% and 4% rises in net written premiums, but the UK & International business saw net written premiums fall 8%.
RSA's total income was broadly flat year on year at GBP3.43 billion.
"RSA is reporting a solid first half 2019. Particularly pleasing is the improvement in current year underwriting results, which represent our best first half in the last 10 years. Our Personal Lines business continues to drive this performance," said Chief Executive Stephen Hester.
The insurer's combined operating ratio worsened to 95.2% from 94.7% a year before. A combined ratio below 100% still shows RSA made a profit from its underwriting.
Excluding exits in its UK & International portfolio, RSA posted a combined ratio of 94.3%.
As a result, the insurer's underwriting profit slipped 11% to GBP153 million from GBP171 million. Excluding the UK & International exits, RSA's underwriting profit grew 5.8% to GBP181 million.
The portfolio exit costs knocked GBP28 million off of RSA's underwriting profit, the company said.
The company noted that in its Personal Lines - which account for 57% of net written premiums - the combined ratio was 89.9% but its Commercial Lines had a combined ratio of 98.8%, meaning only marginally profitable.
Hester continued: "While the full earned effect of underwriting, pricing and portfolio changes will show next year, at this stage we are on or ahead of schedule in each region for those planned actions. There are some headwinds from lower bond yields and weaker prior year development and we have more to do in many areas. Nevertheless, we expect to make continued progress overall."
The company added: "Insurance market conditions remain competitive across our territories with significant price-volume trade offs. However, rate hardening and capacity adjustment is helping us re-price in Canada and in loss-making international business lines."
RSA upped its interim dividend by 2.7% to 7.5 pence from 7.3p the year before.
Shares in RSA Insurance were 2.5% higher in London on Thursday morning at 574.40 pence each.
Related Shares:
RSA.L