Insurance giant
RSA weathered natural catastrophes in Europe and Canada to generate a record underwriting performance in the first half of 2016.
RSA posted a group operating profit of £312 million for the first six months, up by 20% from the £259 million profit achieved in the same period last year. Combined ratio also improved from 96% to 94%.
The profit was produced through RSA’s core markets in the UK (£144 million), Scandinavia (£131 million) and Canada (£69 million).
First-half underwriting profit reached a record level as it soared to £174 million, a stunning 72% increase from last year’s £101 million.
“This is the first half-year in RSA’s history where underwriting profits are higher than investment income,” the
Financial Times quoted RSA chief executive Stephen Hester as saying.
“It is very unusual, in the current environment, to have these kinds of numbers,” Hester also told the publication.
The major insurer had an impressive performance despite huge catastrophe losses of £109 million in the first half, which is £59 million above its forecast and £49 million higher than the weather costs in the same period last year.
Net claims costs for the Fort McMurray wildfires in Canada and for the UK and European floods in June were pegged at £39 million and £35 million respectively.
Hester expressed confidence that RSA will continue to perform well despite economic headwinds and market uncertainties such as the Brexit move.
“The impact of Brexit will take time to play out. But RSA is well placed, with a majority of earnings in foreign currencies,” he said.
“Our agenda for the second half is clear; a continued drive to raise performance through better underwriting, lower costs and strong focus on customers.”
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