Affinity deal accompanies 3 per cent GWP rise in Q1 results
RSA announced a new affinity partnership with Ford, along with strong first-quarter results that saw group net written premiums up 15% to £1.7bn and UK net written premiums up 3% to £661m against the same period last year.
RSA was appointed by FCE Bank, the financial services division of Ford Motor Company in Europe, as the UK provider of branded car insurance for Ford, Mazda, Jaguar, Volvo and Land Rover.
Features from the range of car insurance products and services include free driveaway cover and full annual cover, with benefits including free 31-day foreign use and a courtesy car for the duration of repairs as standard.
Bridget McIntyre, UK chief executive for RSA, said: "Our affinity business is vibrant, and we believe in working with partners who come to us because we have a skill. If it’s on a marginal cost basis, we’re not very interested. But if we can see that by working with a partner we can together develop and generate good business, then we’re really happy to work with partners like that. And Ford came to us for that reason."
In UK personal lines, RSA's motor rates increased by 5% and household rates increased by 4%. On the commercial side motor rates rose 8%, while property increased to 3% and liability remained static.
The only drop in rates was in Canada on the commercial side, where motor fell 4%, liability and property both dropped by 2%.
Andy Haste, Group CEO of RSA, said: “It has been a good start to 2008. Our three month premiums clearly demonstrate the benefit of our strong and diversified portfolio.
“Market conditions remain challenging, however, we continue to exercise tight operational and financial management, including taking the right action on rate and expenses, to deliver sustainable profitable performance. We remain confident of achieving a strong result in 2008 and beyond.”
Internationally, premiums were up 24% to £893m, for which RSA credited organic initiatives, recent bolt-on acquisitions and favourable foreign exchange movements.
In Scandanavia, premiums rose 19% to £589m with the best growth in Denmark and Sweden.
The company said Sweden in particular offers tax incentives, which benefits its business there. But it said it had no plans to move its UK operations despite other insurers including Brit Insurance and Amlin considering more favourable corporate tax regimes.
As reported in the 2007 full-year results, RSA expects to deliver a combined operating ratio for 2008 of around 95%.
