Overall UK COR up 0.4 points after hits from weather, liability and motor

Rising industrial deafness and professional indemnity claims helped push RSA’s UK commercial liability combined operating ratio (COR) to up 32.2 percentage points to 140% in 2013.

The commercial liability COR was 107.8% in 2012.

RSA has had to strengthen reserves for both deafness and PI books of business, which included a £60m reserving margin for future uncertainty.

The company’s personal motor account also took a hit in the year – the COR jumped 10.9 points to 111.7% (2012: 100.8%).  

However, the company’s other UK business lines made underwriting profits in 2013, resulting in a just-profitable COR of 99.2% (98.8%).

This was despite weather claims of £41m during the year.

Deafness and PI claims spike

RSA’s commercial liability book made an underwriting loss of £119m in 2013 (2012: loss of £23m).

The company said: “We have seen increasing frequency of deafness claims and losses in certain segments of our professional indemnity book mainly from prior year claims. As a result we have strengthened reserves in these two books, including an addition of £60m to margin to reflect ongoing uncertainty.”

Personal motor hit

RSA’s UK personal motor book made an underwriting loss of £40m in 2013 (2012: profit of £7m).

The company said the underwriting loss reflected “the impact of lower volumes impacting our expense ratio, some abnormal severity increases and some reserve strengthening.”

RSA cut UK personal motor net written premiums by 9% to £377m in 2013 (2012: £416m) which the company said was caused by its “exit from under-performing segments and continuing competitive market conditions.”

Overall performance

Despite the woes in commercial liability and personal motor, RSA UK as a whole made an underwriting profit of £36m, up 71% on the £21m it made in 2012.

Personal lines underwriting profit was down 17.7% to £51m (2012: £62m). This produced a COR of 97.4% (2012: 96.3%).

The commercial lines division made an underwriting loss of £15m in 2013, an improvement over 2012’s £41m loss. The overall commercial COR was 100.6%, a 0.3 point improvement over 2012’s 100.9%.

Further weather claims

RSA’s UK and western Europe division was hit by £41m of storm claims in 2013.

The firm estimates that the continued flooding and bad weather in the UK in January and February will cost it between £45m and £60m.


RSA UK COR breakdown

Motor 111.7100.8
TOTAL UK99.298.8