UK insurer RSA has announced an underlying profit before tax of £718 million for full year 2020, up 15% from 2019.
Additionally, group business operating result was up 15% at £751 million.
In aggregate, the estimated net impact of COVID-19 from premiums, claims and investment income effects is a £42 million drag on business operating result
RSA’s underwriting profit of £550 million was up 36% from the previous period.
The firm also secured a combined ratio of 91.1% and saw its attritional loss ratio improve 4.5 points vs. 2019, of which an estimated 1.9 points are COVID-19 related
Net written premiums of £6.2 billion were flat against the previous year while Investment income of £258 million was down 16%.
Alongside its full year financial results, RSA has announced the renewal of its Group Volatility Cover (GVC) on a one year basis.
RSA chose to place 75% of the GVC in an effort to balance the cost versus benefit of this protection.
The cover protects cat event and individual large losses from our Property and Construction & Engineering portfolios, with cover attaching where the total of our qualifying losses is greater than £160 million.
Catastrophe event losses qualify in full when they exceed £10 million and individual large losses qualify in excess of a £5 million deductible. The limit of cover is £125 million.
RSA’s main cat retention remains at £75 million for the UK and Europe combined, £50 million for Europe excluding the UK and $75 million for Canada.
“We are pleased to report excellent results for RSA in 2020. Underwriting profits are sharply up to new record levels and return on tangible equity has risen above our target range,” said Stephen Hester, RSA Chief Executive Officer.
“Naturally, the impact of COVID-19 was the major feature of our year, as for society as a whole. We prioritised the safety of our employees and sustaining service to customers. The Group paid out some £4.6bn in ‘normal’ claims whilst also providing for over £250m in COVID-19 specific claims, together with offering a range of other customer support measures.
“The Group has delivered on large parts of our “best in class” ambitions. The quality of earnings is excellent which augurs well for RSA’s prospects in 2021 and beyond. I am proud of the hard work, dedication and focus of all my colleagues in what was a difficult and turbulent year.
“We have built a high performing company and 2020’s results showcase the value creation thereby achieved. This in turn drove the 52% premium we were able to negotiate in Q4 through an all cash bid from Intact and Tryg. The Offer is on track to complete in the coming months, ending a chapter for RSA but not the whole story…”