RSA Insurance Group: 2018 Interim Results
"RSA is reporting a strong first half. Activity is high across the Group, aimed at building capability to outperform in our markets.
First half underwriting results were below our ambitions due to adverse weather costs. On an underlying basis we showed areas of excellent performance however, and with much we can continue to improve."
Trading results
* Statutory profit after tax up 19percent to
* Pre-tax profits up 12percent to
* Group operating profit of
* Underwriting profit of
* * Group combined ratio of 94.7percent (H1 2017: 93.2percent): Scandinavia 87.6percent,
* * Attritional loss ratio up 0.4 points but flat net of changes in reinsurance
* * Group weather costs elevated at 4.9percent versus a benign prior year (H1 2017: 1.2percent)
* * Large losses improved to 9.7percent of premiums (H1 2017: 11.4percent)
* * Group prior year underwriting profit of
* Net written premiums ('NWP') of
* * Headline premiums were dampened by c.pound sterling180m of budgeted reinsurance costs, primarily for the triennial Group Volatility Cover ('GVC') renewal
* * NWP up 1percent1 in Scandinavia, with
* * NWP up 5percent1 in
* * NWP down 5percent1 in
*
* Investment income of
* Below the operating result, interest expense more than halved following debt restructuring actions in prior years. As planned, restructuring charges fell away (H1 2017:
* Headline earnings per share (EPS) up 18percent to 21.8p (H1 2017: 18.4p). Underlying EPS2 down 10percent to 21.0p due to adverse weather (H1 2017: 23.3p)
* Interim dividend of 7.3p per ordinary share declared, up 11percent.
Capital and balance sheet
* Solvency II coverage ratio of 169percent after dividend accrual (
* Tangible equity
* Return on tangible equity of 16.2percent (H1 2017: 13.1percent) in upper half of 13-17percent target range.
Strategic update
* RSA's focus is on building capability for outperformance in our markets. In that context, our many performance improvement initiatives continue to deliver progress; targeted at customer service, underwriting capabilities and costs
* Financial market conditions have been relatively stable as they impact RSA, albeit with negative foreign exchange impacts of circa 2percent in the first half. Political uncertainties in the
* Insurance markets remain competitive overall, with significant variations by region and by product line. Scandinavian markets were relatively stable. In
Footnotes:
1 At constant FX
2 Underlying measure, please refer to pages 27 to 32 of the full 2018 Interim Results announcement (PDF) for further information.
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