Premiums and profits fall and combined ratio rises

RSA announced 2009 net written premiums were up 4% but operating profit was down 10%, pre-tax profit down 27% and profit after tax down 28%.

The UK saw net written premiums fall nearly 3%, with the underwriting result down more than 24%. The UK combined ratio rose slightly to 98%.

Financial highlights (2008 in brackets

  • Net written premiums £6,737m (£6,462m)
  • Underwriting result £386m (£384m)
  • Combined operating ratio 94.6% (94.5%)
  • Operating result £777m (£867m)
  • Profit before tax £554m (£759m)
  • Profit after tax £419m (£586m)

Breakdown £m (2008 in brackets)

Net Written premiums

  • United Kingdom 2,632 (2,711)
  • International 3,249 (2,998)
  • Emerging Markets (833 738)
  • Group Re 23 (15)
  • Total Group 6,737 (6,462)

Underwriting results

  • United Kingdom 75 (99)
  • International 282 (262)
  • Emerging Markets 29 (23)
  • Total Group 386 (384)

Combined Ratios (%)

  • International 91.7 (91.2)
  • UK 98.0 (97.6)
  • Emerging markets 95.1 (96.4)
  • Total Group 94.6 (94.5)

Chief executive Andy Haste said: “2009 was a good year for the Group. We delivered another strong performance and have driven the Group forward through targeted organic growth and acquisitions in Emerging Markets and International.

“We’ve continued to take the right action on rate and expenses and delivered a positive underwriting result in all regions. Our capital position remains strong.

UK is tough

“The UK remains a tough market and premiums are stable at £2,632m, with the impact of the downturn mitigated by targeted growth and action on rate. The underwriting result remains positive at £75m with a COR of 98%.

“In Personal, premiums were in line with 2008 at £1,095m, with lower Household premiums offset by 5% growth in Motor driven by Broker Panels and Affinity.

“Pet continued to perform well and premiums are up 17%. In Commercial, premiums declined by 5% to £1,537m, with lower Motor premiums mitigated by strong growth in Specialty lines, with European Risk Solutions up by 47% and Marine up 21%.

Motor rates

“We have continued to take action on rate, achieving renewal increases in Commercial of 6% in Motor, 8% in Liability, and 3% in Property and in Personal we’ve increased Motor rates by 7% and Household by 3%.

“We also continue to push rate hard on Motor new business and have achieved double digit increases in Personal lines.

“On costs, we have achieved run rate savings of £64m and expect to deliver the full £70m by the end of the first quarter of 2010, ahead of our target of mid 2010.

“Costs to date are £75m against the expected £80m for the complete programme. On headcount we have achieved the reduction of 1,200 heads announced in February 2009 and UK heads of 7,750 are down over 40% since 2003.

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