RSA posts underwriting growth in H1 but profit dips due to COVID-19

UK-based commercial insurer RSA Insurance Group reported a slight decline in its profit due to the impact of COVID-19 but its combined ratio improved in the first half of 2020.

The insurer said that its first half results were driven by business improvement actions taken over recent years and focus on underwriting quality, whilst pushing hard on cost efficiency. Excluding COVID-19 impacts, the company improved its attritional loss ratios, as well as large losses.

RSA posted a pre-tax profit of £211 million in the first half of the year, down 7 percent from £227 million in the same period of 2019, due to the impact of COVID-19 on the financial market. Meanwhile, the company's underwriting profits rose 33 percent.

Group net written premiums stood at £3.13 billion in H1 2020, compared with £3.25 billion in the prior-year period.

The group combined ratio for the period was 93.3 percent, an improvement from 95.2 percent in the first half of 2019.

The company expects to pay out £2 billion in claims costs for H1.

Stephen Hester, RSA Group chief executive, said: “RSA is reporting good growth in underwriting profits for the first half from continued business improvement actions. COVID-19 impacts on operating profits were broadly neutral in H1, though related financial market charges reduced our statutory results.

"Each region of RSA contributed in line or better than our plans, driven by improved attritional loss ratios. We are pleased with progress towards our best in class ambitions, and the underwriting performance which is a first half record for RSA."

"COVID-19 has dominated recent months," Hester added. [...] "Nevertheless, we see good prospects for RSA remaining resilient and emerging strongly from this period.”