Chief executive says brokers ‘can take comfort’ in insurer’s financial strength.
RSA says it has walked away from £190m of business to date this year as it seeks to boost rates.
The insurer has maintained steady premium levels despite rate increases across the board, according to its interim management statement for the third quarter.
Its UK net written premium stood at £2.03bn for the nine months to 30 September 2008, in line with the previous year. The insurer said it was on track for a combined operating ratio of 95% or better at the full year.
Adrian Brown, RSA’s UK chief executive, pointed to its conservative investment strategy and emphasised the stability of its balance sheet.
“Brokers can take comfort in our financial strength in a market with lots of uncertainty,” he said.
In personal lines, premiums increased by 1% to £824m. In commercial lines, premiums remained at £1.21bn, in line with the previous year.
The insurer withdrew capacity from unprofitable areas such as small and mid-corporate property, and this was offset by growth in areas such as marine and fleet.
Rates increased by an average of 5% across personal motor and household. In commercial, rates rose by an average of 4% on liability, 7% on property and 9% on motor. Retention across the UK stood at about 80%.
RSA’s financial position remained strong, thanks to its low-risk investment strategy. Unlike some of its competitors, only 7% of its total investment portfolio is in equities and 75% of that is hedged. The investment portfolio totalled £13.5bn at 30 September, compared with £13.2bn at the half year, with foreign exchange gains and other positive portfolio movements offsetting mark-to-market value adjustments.
Brown added that the group would seek new opportunities and would consider bolt-on acquisitions. He declined to comment on market speculation that RSA had taken tough action on commissions, but said it was negotiating with brokers on a case-by-case basis.