RSA UK business takes £50m hurricane hit

RSA’s UK business has taken a £50m hit in the third quarter of 2017 because of claims from the US and Caribbean hurricanes.

It warned that its ultimate claims bill from the hurricanes could be higher as claims develop.

The insurer also revealed that it had suffered an increase in large claims from “certain UK domestic broker schemes”, which has prompted the company to re-underwrite the relevant portfolio.

Despite this, RSA UK and international chief executive Steve Lewis (pictured) praised the “real and positive momentum” in the UK business as net written premiums grew 5% in the first nine months of 2017.

Hurricane hit

RSA had previously announced in a September trading update that it expected its UK business to be affected by claims from the hurricanes. The claims will fall on RSA UK’s Global Risk Solutions unit.

A series of hurricanes hit the US and Caribbean in the third quarter, including Harvey, Irma, Jose and Maria.

RSA said in its third-quarter trading update this morning: “Claims notifications for these events are still developing, and we expect this provision to increase somewhat.

It added: “Our reinsurance protection provides good cover for Q4 ‘event’ losses overall.”

Speaking to journalists this morning, Lewis added: “The losses are still relatively modest comparted to other market participants.

Large losses

In addition to the hurricane hit, RSA said that there had been an increase in large losses in the UK business from three sources: marine, European property in the international segment and UK domestic broker schemes.

On the UK schemes Lewis said: “That is one area where we have taken action to re-underwrite the portfolio.”

‘Positive momentum’

On a positive note, RSA said that its UK gross written premiums for the first nine months of 2017 were up 5% to £2bn. Three percentage points of the growth came from higher business volumes, with rate increases adding a further point of growth.

RSA said the volume growth was driven by its Smart Wheels telematics product, which offset “flat” volumes in commercial.

Lewis said: “In the UK it is very much a story of continued progress. We have real and positive momentum across many areas of our business.”

In addition to the telematics offering, Lewis said other high points in the UK were the Motability commercial motor partnership, under which RSA insures vehicles provided to disabled people under the Motability scheme, and the new partnership with UK building society Nationwide, which is due to go live in December.