Commercial drives RSA’s 4% Q1 growth as personal slumps

RSA’s UK business grew net written premiums by 4% to £725m in the first quarter of 2012 (Q1 2011: £694m).

The growth was driven by the insurer’s commercial net written premiums, which increased 11% to £395m (Q1 2011: £357m).

However, personal lines NWP fell 2% to £330m (Q1 2011: £337m), mainly because of a 17% drop in motor business.

“The UK delivered another good top line performance, with premiums of £725m up by 44%,” RSA said in its first quarter 2012 interim management statement. “In line with our strategy, we have driven growth in household, pet and marine while being more targeted in motor and in our commercial broker distribution.”

Within personal lines, RSA reported a 7% growth in household, driven by last year’s acquisition of Oak Underwriting and growth in personal broker business, and an 11% increase in pet business. This was offset by a 17% drop in motor “where we have continued to push rate and reduced capacity in personal broker”.

RSA said it continued to build good momentum with personal lines affinity partners. The insurer is in the final stages of negotiation to provide home and pet insurance to John Lewis and Waitrose customers in the UK.

It added that it has recently signed a deal with broking group Gallagher UK’s underwriting agency OIM Underwriting, covering household and property. The deal is expected to generate premiums of around £75m.

RSA’s 11% commercial NWP growth was driven by a 9% growth in marine premium to £82m and a 9% increase in commercial motor to £130m, which RSA attributed to rating action.

“In commercial broker distribution, we are implementing our targeted strategy and, as planned, we have withdrawn from around 200 of our least profitable relationships whilst continuing to work with our key brokers to build partnerships which enhance service and value,” the company said.

RSA achieved Q1 price increases of 8% and 7% in personal motor and household, respectively. In commercial motor, the company put prices up by 9%, but rate increases in commercial liability and property were more muted at 2% and 4% respectively.