RSA misses target but premium income climbs

“The progress at RSA overall leaves Group profits ahead of the same period in 2016 though by less than we had targeted.” These were the words of RSA Group chief executive Stephen Hester when the insurer, one of the biggest in the UK and beyond, released its third quarter trading update this morning. 

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Here are the numbers:

• Earnings per share year-to-date (YTD) ahead of 2016; however, held back by third quarter 2017 underwriting results.
• Overall Group underwriting results slightly weaker compared to 2016, with results partly impacted by US/Caribbean hurricane costs.
• Underwriting results for Scandinavia, Canada, Ireland, and Middle East YTD ahead of 2016.
• Except for the UK, YTD attritional loss ratios improved versus 2016 in all regions.
• YTD Group net written premiums of £5,077 million (approximately US$6,729 million) up 8% (excluding impact of Latin America & Russia disposals in 2016); up 3% at constant FX rates.

In addition to the effect of the hurricanes in terms of costs, RSA also noted the lingering impact to the UK of the adverse household trends reported in the first half. Also, UK large losses YTD are elevated in the marine and international portfolios, as well as certain UK domestic broker schemes.

“We are continuing to drive business enhancements across the Group, while taking further underwriting action in some portfolios to improve performance for 2018,” said Hester.

As for weather losses in the third quarter, the insurer included a provision of £50 million against US and Caribbean catastrophe events, which were booked in the UK business segment. “Claims notifications for these events are still developing, and we expect this provision to increase somewhat,” said RSA.