RSA chief executive positive despite "extremely tough year"
RSA Group chief executive Andy Haste says he expects the insurer's overall combined ratio to be better than 95% in 2011.
RSA this morning posted an 11% increase in net written premiums to £7.5bn. The overall COR was 96.4%, including 3.5 points of weather losses (2009: 94.6%).
The group's underwriting result was £238m (2009: £386m) with a current year underwriting loss of £29m (2009: profit of £100m) and a prior year profit of £267m (2009: £286m).
Pre-tax profit fell 14% to £474m (2009: £554m). The group's operating result fell 18% to £636m (2009: £777m)
Haste said: “This is a strong top line and robust underwriting performance in what has been an extremely tough year for the industry and to deliver a combined ratio of 96.4% in these conditions underlines the strength and resilience of the Group.
"We go into 2011 with confidence and despite challenging market conditions, expect to deliver targeted growth in the UK, around 10% in International and double digit growth in emerging markets. As it stands today and assuming a return to more normal levels of weather losses, we also expect to deliver a combined for the group of better than 95%.
"Our strategy of targeted growth in the UK while realising the strong growth opportunities in International and Emerging Markets will result in a further shift of the business towards these regions."
He said RSA is aiming to double premiums in its emerging markets business by the end of 2015 to around £2.2bn .
"We would expect international and emerging markets to represent around 70% of total premiums in the next five years. The 7% increase in the final dividend to 5.70p (2009: 5.33p) reflects our confidence in the outlook for the group,” he added.
RSA's investment result was £538m (2009: £523m), including investment income of £569m (2009: £595m) and total gains of £63m (2009: £28m).
Shorecap analyst Eamonn Flanagan described RSA's performance as a "strong result considering the extent of the severe weather losses across the group."
Premium breakdown by region:
2010 (£m) 2009 (£m) % change
International 3,536 3,249 9
UK 2,925 2,632 11
Emerging Markets 964 833 16
Group Re 30 23 30
Total Group 7,455 6,737 11