2017 Interim Results: Chief Executive’s Statement
RSA is pleased to report another half year of outperformance. But we are not relaxing. There is much more we aim to improve--for both customers and shareholders. Competitive markets and our own raised ambitions will demand no less.
Across RSA's markets, conditions are essentially unchanged versus 2016 though with many variations by business line and geography. We are carefully watching inflation trends, notably in the
RSA's restructuring efforts were completed by the Pounds834m sale of
Our best-in-class ambitions are being pursued through companywide efforts to improve customer service and underwriting skills, and to reduce operating costs.
Net written premiums grew 11 percent in the period, with higher retention and new business adding to pricing and FX gains. Although top line growth is not our highest priority, it is nevertheless pleasing that customers are responding to the improved capabilities we are deploying.
While underwriting results will always be 'noisy' over short periods, we are pleased with continuing progress, and a combined ratio of 93.2 percent is our best on record. In terms of volatile items, better than planned weather costs were offset by higher than usual large losses. Attritional loss ratio improvement continued with an H1 ratio of 54.9 percent vs 55.2 percent for H1 2016 at constant FX.
Cost efficiency remains crucial for all businesses in our industry. RSA continues to track ahead of our plans in this regard, with gross cost reductions of 8 percent (CFX) vs prior year.
The strength of our regional line-up also showed well in the period. Our Scandinavian business contributed a majority of underwriting profits with strong underlying advances and above trend prior year profits.
Across RSA improvement programmes are continuing to deliver. Our digital capabilities are improving, with notable advances in digital claims and policy servicing. New, more sophisticated underwriting and pricing models continue to roll out. Cost programmes around automation, site consolidation, lean methodology, outsourcing and zero-based budgeting are all progressing.
Overall, RSA is in good health. We have much to do. We will fall short in areas. But we nevertheless expect to make continued good progress in pursuit of sustained outperformance.
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