Insurer RSA has bounced back to profit in the second half of 2014 on the back of an action plan conceived by chief executive officer Stephen Hester designed to turn the business around.
The insurer’s profit hit £69 million, a big improvement on the £494 million loss made in the first half of 2013. This was despite weather-related losses and underwriting losses in Ireland of £64 million as the insurer’s clean-up continues. It added that its goal is to return its units in Ireland to profitability in 2015.
Its net written premiums fell 9 percent to £3.9 billion in the six months ended June 30, 2014. RSA said this reflected its portfolio action plan and a more disciplined underwriting approach.
RSA posted a combined operating ratio of 100.8 percent, a deterioration compared with 94.2 percent in the first half of 2013.
It has also agreed disposals of operations in the Baltics, Poland, Noraxis and China with total proceeds of £591 million.
Stephen Hester, RSA Group chief executive, said: "RSA's Action Plan is going well. Since announcing it five months ago, we have made strong progress improving strategic focus and capital health. Good work is also underway on cost, portfolio actions and the management line-up to drive future performance.
“While first half profits are modest, they reflect further balance sheet and reserve clean-up as well as above normal weather costs. Underlying business trends, together with the actions outlined, are supportive of achieving the medium-term customer, capital and shareholder targets we have set.
“RSA is again a strong international general insurer. We intend to build a track record of delivery, and increasingly of excellence."
RSA, Europe, Second Quarter 2014 Results, Stephen Hester