RSA's UK premiums up 9%

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Insurer boosts personal lines broker business after "deliberately underweight" strategy

RSA's UK premiums increased 9% in the first half of 2010 to £1.46bn from £1.34bn, which the firm attributed to continued focus on on underwriting discipline, targeted growth and rating action.

However, the UK division's underwrting result fell to £2m in the first half of 2010 from £33m in the same period least year, and the operating profit declined to £143m from £157m. The division's combined ratio increased to 98.9% from 97.4%.

“The underwriting result of £2m and COR of 98.9% were impacted by severe winter weather and large losses, which together are £42m worse than last year." the company said in a statement.

Personal lines

Personal lines premiums increased 10% to £600m, with motor up by 14% and household up by 5%. RSA attributed the growth to ratng actions and strong growth in the personal broker channel due to increased shares on targeted broker panels.

“Given pricing and market conditions, we have been deliberately underweight in the broker market," RSA said. "However, in late 2009 we started to see rate come back and, in the first half of 2010, we have implemented significant rate increases in our target panels."

Pet insurance premiums were up 9%. In the first quarter, RSA signed a contract with supermarket Tesco, which it expects to generate around £100m of net written premium in 2011.

Commercial lines

Commercial premiums increased by 9% to £900m, with growth in specialty lines, a 10% increase in risk solutions and a 15% increase in marine. The firm said that it had also seen a strong returnto growth in commercial motor in the first half of the year, with a 23% increase in premiums.

“We have continued to take action on rate, increasing personal motor rates by 13% and Household by 4% and achieving increases in commercial of 5% in liability, 3% in property and 5% in motor," RSA said.

Group result

RSA's group net profit increased to £224m in the first half of 2010 from £223m in the first half of 2009. The underwriting result fell to £136m from £183m and the combined operating ratio increased to 94.8% from 93.5%. Net written premiums increased to £3.8bn from £3.49bn.

RSA said its H1 figures made it “excited about future prospects” with hope that its combined ratio for 2010 would be around 95%.

Andy Haste, CEO, said: “We have delivered a strong top line performance and a resilient underwriting result in what has been a tough six months for the industry, with significant weather losses and the earthquake in Chile.

“Premium growth is driven by targeted organic initiatives and the benefit of recent acquisitions. The resilience of our underwriting result is a testament to our strong and diversified portfolio, our relentless focus on underwriting discipline and our prudent reinsurance and reserving policies.

“We are excited about the Group’s prospects. We expect to maintain top line momentum in the second half and, as it stands today, we continue to expect to achieve a combined operating ratio of around 95% for the full year.”