RSA shrinks as turnaround plan kicks in
UK insurer RSA said a more disciplined underwriting approach was behind a fall in its net written premiums in the first quarter of the year, a period during which it also completed a rights issue to shore up its capital base.
Its underlying net written premiums were down 15 percent in the quarter at £1.9 billion compared with £2.3 billion a year earlier. The company said this reflected the effects of its portfolio action plan and a more disciplined underwriting approach across all regions.
RSA said the business had performed well in Scandinavia but had been hit by severe weather and associated catastrophe losses in the UK, Ireland and Canada.
It said insurance market conditions in the quarter had been variable across it's territories. In Scandinavia, conditions were relatively stable. In Canada there was increased competitive pressures on rates, while in the UK the pressures were greater with falling prices at an industry level reported across both personal and commercial lines.
Stephen Hester, chief executive of RSA, said: “There has been intense activity in the first quarter of 2014. We set out a clear action plan in February to transform the performance of the business and have made a good start in implementing it. We are especially grateful to shareholders for supporting RSA’s new direction and the rights issue which has now completed.
“During the quarter we have also taken action to address underperforming portfolios, the results of which can be seen in our IMS today. Underlying premium and profit trends are generally in line with our expectations. Poor weather in the UK, Ireland and Canada negatively impacted first quarter profits.
“There remains much to do and we operate in a challenging and competitive market place. 2014 is a foundation year, but one where we hope to make solid progress. Our priorities will be consistent: to serve customers well; operate with capital strength; and focus on driving shareholder value.”
