RSA 2017 profit jumps despite London Market loss
UK insurer RSA has posted a jump in net profit in 2017 despite underwriting losses in the London Market.
Profit after tax increased to £322 million in 2017 from £20 million in 2016. Group net written premiums grew to £6.68 billion from £6.41 billion over the period. The combined ratio improved slightly to 94.0 percent in 2017 from 94.2 percent in 2016.
“Excellent underwriting results in Scandinavia, Canada, Middle East and Ireland were partly offset by poor UK (and related London market) results,” said RSA CEO Stephen Hester.
“It is our task in 2018 to deliver a bounce-back in the latter whilst sustaining underlying progress across the Group as a whole,” Hester added.
The disappointment was caused by the UK business (including RSA’s European branches and London market Commercial Lines business). A combined ratio of 102.0 percent reflected three major loss items; £72 million of losses from US/Caribbean hurricanes and Mexican earthquakes, elevated Household ‘escape of water’ inflation and significant adverse large loss volatility versus long-term averages. Underwriting action is well underway to improve results in 2018, Hester said.
The UK & international business segment delivered operating profit of £133 million, down 44 percent. The combined ratio of this business segment deteriorated to 100.5 percent compared to 97.2 percent in 2016.
“The Group’s performance ambitions remain high and we target further improvement in 2018 and thereafter,” Hester noted.
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