RSA Insurance Group has announced a current year underwriting profit of £314 million for 2019, representing growth of £229 million when compared with the prior-year while the total group underwriting result increased by almost 39% to £346 million.
Excluding exit portfolios, RSA’s underwriting profit reached £405 million in 2019, while the level of current year underwriting profit achieved in the period is actually a record for the UK-based company.
RSA’s combined ratio, ex. exits, hit 93.6% in 2019 and inc. exits totalled 94.6%, marking an improvement on the 96.2% recorded in 2018. By region, and RSA reveals that the Scandinavia combined ratio hit 87.4%; Canada 94.5%; UK & International 95%, ex. exits. Inclusive of exit portfolios, RSA’s UK & International segment recorded a combined ratio of 97.1% in 2019.
Overall, RSA’s underlying profits before-tax hit £624 million (ex. exits) and £565 million (inc. exits), while statutory pre-tax profit increased by 3% to £492 million despite the impacts of both exits and charges.
Ex. exits, RSA’s group business operating profit reached £656 million in 2019, with £286 million experienced in Scandinavia, £159 million in Canada, and £279 million in UK & International (£220m inc. exits). In total, group operating profit reached £597 million for RSA in 2019, compared with £517 million a year earlier.
“We are pleased to report strong results for RSA in 2019. Our profits are up, our dividends are up and return on tangible equity is very good. This progress is driven by improved underwriting, which has produced record current year profits and combined ratio,” said Stephen Hester, RSA Group Chief Executive Officer (CEO).
“2019 was an important period for RSA. Significant management renewal and a repositioning of our UK & International division are showing good promise. Our Groupwide focus on underwriting improvement with strong cost control proved effective. Yet there is plenty more we can do to improve each of our businesses for customers and shareholders. There are challenges, but we are determined to drive further progress and high performance,” he added.
RSA’s group attritional loss ratio improved in the year, while group weather costs of 2.6% of premiums represents an improvement from the 3.7% recorded in 2018. Ex. exits, large losses amounted to 9.7% of premiums in 2019, total 10%, versus 11.6% in 2018.
Net written premiums actually fell by 1% in 2019 to £6.417 billion for RSA, driven by 1% growth in Scandinavia and 3% growth in Canada, which was more than offset by a 7% dip in premiums in UK & International as a result of underwriting actions.
As expected, says RSA, investment income fell by 5% in 2019 to £306 million, compared with £322 million in 2018.
“RSA’s focused regional strategy is working well. Our ambition to drive towards “best in class” performance levels remains in place and we are optimistic about the ability of our business to improve further to that end. We target progress in each of our three regions in 2020. We have headwinds from lower investment income and adverse FX translation, but believe that EPS growth overall is again in prospect, subject to normal underwriting volatility,” said Hester.
