Insurer issues profit warning, with £142m taken off full-year results
RSA UK chief executive Adrian Brown says his firm’s profit warning may have surprised analysts because of the costly nature of burst pipe claims caused by the bad weather in November and December.
In the profit warning last week, the insurer said the impact made by the weather resulted in a figure £142m lower than normal across the group.
According to Brown, typical cold weather claims come in at around £1,000, while RSA’s average claim estimate for the two months is £6,700. “What has caught people out is that burst pipe claims cost significantly more than normal weather claims,” he said.
RSA attributed £110m of the £142m impact to the UK. It said the bulk of this amount – £72m – was from household claims, largely burst pipes.
As a result of the losses, RSA estimated that its full-year operating profit would be between £600m and £630m.