Largely thanks to adverse weather, RSA saw declines in both its group operating profit and underwriting profit for the first half of 2018.
From £222 million (around SG$396.8 million) in the same period last year, underwriting profit fell 23% to £171 million (around SG$305.6 million). Group operating profit of £304 million (around SG$543.3 million), meanwhile, represents a 15% slide from 2017’s £360 million (around SG$643.4 million).
The insurer attributed the drop to adverse weather, which it said was £53 million in excess of the five-year average.
“First half underwriting results were below our ambitions due to adverse weather costs,” commented RSA group chief executive Stephen Hester when the firm announced its half-year figures this morning. “On an underlying basis we showed areas of excellent performance however, and with much we can continue to improve.”
Here are the numbers, per region:
Operating profit
Scandinavia – £147 million, down 25%
Canada – £25 million, down from £68 million
UK & International – £144 million, up 33%
Underwriting profit
Scandinavia – £112 million
Canada – loss of £4 million
UK & International – £72 million
Combined ratio
Scandinavia – 87.6%
Canada – 100.5%
UK & International – 95.3%
“Weather was the dominant feature of the first half and the comparison is further distorted by a benign H1 2017,” noted the insurer in its results announcement. “Group weather costs were £155 million or 4.9% of net earned premiums. Canada was the most affected region with a weather ratio of 10%, twice the annual five-year average.
“In particular, at a cost to the industry of more than $500 million, the windstorm of early May is likely to be the most costly insured event in Ontario and Quebec since the 2013 Toronto floods. The UK & Ireland saw Storms Eleanor and Emma, with Emma known locally as the ‘Beast from the East’ and costing an estimated £47 million pre-tax.”
Meanwhile RSA, which posted a group combined ratio of 94.7%, reported a 12% increase in pre-tax profit to £296 million, as well as a 19% climb to £245 million in statutory profit after tax.
