Personal lines jump £33m as insurer pushes for affinity deals and acquisitions
Royal & SunAlliance (R&SA) is looking to more affinity deals and acquisitions in 2007 after third quarter results showed UK underwriting profits rose by 16% to £129m.
The insurer saw a fall in commercial lines however, delivering an underwriting profit of £77m compared with £92m in 2005, but personal lines saw a £33m jump on last year to £52m reflecting a strong growth in household.
Bridget McIntyre, UK chief executive, said: "We are looking at growing further with more affinity deals, acquisitions within our core businesses, more relationships with brokers and organic growth."
Earlier this year, R&SA stated its objective to be number one in the broker market by choice, reputation, capability and profitability by 2010.
R&SA's net written premiums for UK personal lines were £637m in the third quarter compared with £639m for the same period in 2005, with new business sales up 32% on 2005 to £170m. Although in commercial, net written premiums fell to £1,273m from £1,364m in 2005.
Overall, net written premiums of £1.9bn were 5% down on 2005 when the figure stood at £2bn.
McIntyre said this was because of a "tough" market and a reflection on the focus of achieving technical price commitments and maintaining underwriting discipline and driving retention, which stands at 84%.
R&SA's target segments are building momentum, with new business sales seeing an increase of 23% to £212m with the company signing 26 deals this year, she added.
R&SA's agreement with Paymentshield, the supplier of general insurance to mortgage intermediaries, is also expected to boost profits further.
"We expect this deal will generate household premiums of around £100m in 2007 and over £200m in 2008," said McIntyre.
R&SA's group premiums of £4.1bn were up 2% on 2005, and the operating ratio was 93.1%. Profit before disposals increased by 40% to £477m.
And R&SA's direct SME arm More Th>n delivered net written premiums of £340m and achieved a core operating ratio of 89.6%, 4.9 points better than 2005.