With the interim 2020 results of several insurers having been posted over the course of the last week, the tangible impact of the COVID-19 pandemic on the insurance sector is coming into view. The results revealed this morning by RSA Insurance Group have bucked the overall trend of loss, however, with the insurer posting a first-half operating profit rise of 13% compared to H1 2019.
The group’s underwriting profit stands at £240 million (approx. CA$418 million), up 33% from prior year results, with a healthy group combined ratio of 92.2%. The combined ratio for just Canada stands at 93.2%. The group business operating result came in at £349 million (approx. CA$608 million), with Canada at £88 million (approx. CA$153 million), while the group total business operating result was £316 million (approx.. CA$551 million) in comparison with H1 2019 at £280 million (approx. CA$488 million).
The COVID crisis, however, has not left RSA entirely unscathed, with statutory profit before tax down 7% to £211 million (approx. CA$368 million) due to COVID-19 market related impacts, and investment income down 13% to £134 million (approx. CA$233 million) after £6 million (approx. CA$10.4 million) of COVID-19 impact.
Commenting on the results, Stephen Hester, RSA Group CEO, noted that the business is reporting good growth in underwriting profits for the first half from continued business improvement actions. The impact of COVID-19 on operating profits was mostly neutral in H1, he said, though the group’s statutory results were impacted by related financial market changes.
“Each region of RSA contributed in line or better than our plans, driven by improved attritional loss ratios,” he said. “We are pleased with progress towards our ‘best in class’ ambitions, and the underwriting performance which is a first half record for RSA.”
Lockdown measures in Canada meant that 95% of employees had to swiftly transition to working from home but it was noted that service levels remain strong with brand and agent net promoter scores at a 12-month high. Hester highlighted that COVID-19 has dominated recent months and that uncertain times put a special premium on sustaining customer service while operating safely and securely for employees and other stakeholders.
“This has been our focus and will remain so over the rest of the year,” he said. “The recovery path from the pandemic itself is not yet certain, as well as its human and economic consequences. Nevertheless, we see good prospects for RSA remaining resilient and emerging strongly from this period.”
