2nd Aug 2018 08:36
LONDON (Alliance News) - RSA Insurance Group PLC on Thursday reported underwriting and operating profit "below our ambitions" in the first half of 2018 as a result of weather-related claims.
The FTSE 100-listed insurance company's pretax profit for the six months to June 30, increased 13% to GBP296 million from GBP263 million recorded last year. The pretax line was helped by lower interest costs and GBP5 million non-operating credit versus a GBP67 million non-operating charge a year before.
However, operating profit decreased by 15% to GBP304 million from GBP360 million due to claims caused by harsh weather, especially in Canada, the company said.
Underwriting profit dropped by 23% to GBP171 million compared to GBP222 million a year ago.
Combined ratio at a group level was 94.7% versus 93.2% a year ago, with results under 100% indicating underwriting profitability. At a regional level, in Scandinavia was 87.6%, in Canada 100.5% and in UK & International 95.3%.
"The group combined ratio of 94.7% was good by historical standards, but short of our plan and of the first half of 2017 due to adverse weather costs," Chief Executive Officer Stephen Hester said.
He added: "Our view of RSA's underlying earnings capacity is unchanged however."
Net earned premium decreased year-on-year to GBP3.2 billion from GBP3.3 billion, with Scandinavia down 15%, Canada up 5.7% and UK & International up 1%.
Despite the falling results, the insurance company upped its interim dividend by 11% to 7.3 pence per share from 6.6p a year ago.
"We enter the second half of 2018 with confidence, while mindful of market challenges," Hester said.
RSA shares were trading down 0.9% at 635.80p each early Thursday morning.
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RSA.L