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 (see page 3).
"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 Than delivered net written premiums of £340m and achieved a core operating ratio of 89.6%, 4.9 points better than 2005.