First quarter profit up 6% on last year to £35m
A strong personal lines performance helped Royal & SunAlliance to a £35m underwriting profit in the first quarter of 2006, despite a weaker commercial lines result.
The insurer reported a 6% increase in underwriting profits on the same period last year, in what its new UK chief executive Bridget McIntyre described as "the most difficult trading environment for some time".
The UK combined operating ratio (COR) was 93.8%, compared to 94.3% in the first quarter of 2005. But net written premiums (NWP) were 7% down on the same period last year at £605m.
McIntyre said the results demonstrated a "disciplined performance".
In personal lines, the company reported an underwriting profit of £10m, compared to £2m in 2005, against NWP of £207m. McIntyre said the performance reflected the favourable weather conditions and claims process improvements.
She added that "low single digit" rate increases had been achieved across the portfolio compared to rates in March 2005 - 4% in motor and 6% in household.
In addition, R&SA joined six new broker panels in the quarter and gained £30m of new affinity business.
But in commercial lines, underwriting profit slipped by £6m, compared to the first quarter of 2005.
McIntyre attributed the result to a number of large property claims in the quarter, coupled with the difficulty of matching 2005's "exceptional" commercial motor performance.
Rates also deteriorated across the main commercial classes. McIntyre said the rating environment was "competitive" but the company would put increases in where needed and would "walk away from business if the price was not right".
"This was a sixth consecutive quarter with a sub-95% combined operating ratio," said McIntyre.
The commercial COR was 93.3% compared to 91.9% in Q1 2005.