RSA UK first half profits flat

RSA reported first half to June UK operating profit of £144m, unchanged from a year ago.

The combined operating ratio was also unchanged at 94.4%, while net written premiums slipped to £1.275bn from £1.282bn, and the UK underwriting profit eased to £76m from £77m.

RSA said it expects underlying premium trends to continue into the second half of the year, ”with a continued focus on underwriting discipline”.

Group operating profit rose 20% to £312m, and the group reported a first half underwriting profit rose 72% to £174m.

The first half saw worse than expected weather and large losses, including £35m for UK and European floods in June.

”In tough, competitive insurance markets and with significant financial market volatility, our results are even more satisfying,” RSA group chief executive Stephen Hester said.

Hester said the group has achieved its “strategic focus” through its programme of disposals. And he added that the group’s performance improvement is being driven by underwriting gains and cost cutting.

”In fact our interim results were actually held back by volatile items in weather/large losses,” he said.

“Our agenda for the second half is clear; a continued drive to raise performance through better underwriting, lower costs and strong focus on customers. We expect that 2016 will be another year of great progress for RSA.”

UK premiums were down 1% year on year in the first half.

Results breakdown

Total UK personal NWP fell 7% to £496m, with personal lines underwriting profit falling to £14m from £36m, and the COR widening to 97.5% from 93.8%

That included an 8% decline in household NWP to £248m, with underwriting profit more than halved to £26m from £53m, and a 13% fall in personal motor NWP to £110m, though the loss was reduced to £11m from £18m.

UK commercial lines NWP rose 4% to £779m, with the underwriting profit rising to £62m from £41m, while the COR improved to 92.2% from 94.8%.

UK commercial property NWP fell 3% to £318m, with the profit easing to £42m from £54m, while commercial motor NWP rose 13% to £131m, though it fell to a loss of £2m from a £2m profit a year ago.

Ireland premiums were up 11% due to strong price increases.

”In the second half of 2016 we will continue to focus on raising performance levels. Markets will remain competitive. Our priority is to maintain underwriting discipline,” Hester said.

”We are on track for a strong underwriting improvement in 2016 overall, subject to volatile items in weather, large losses and prior year reserving.”

And he said RSA expects to make further cost reductions in the second half of the year.