Household and motor claims spiked in November and December

RSA's full year 2010 results will be hit by £255m in weather-related claims.

The insurer expects operating profits between £600m and £630m, net written premium growth of 11% and a combined operating ratio between 96.5% and 97% for the full year of 2010.

The results outlook has taken some analysts by surprise. Jefferies analyst James Shuck said RSA's profit figures are 20-30% below his company's estimates as it had not yet factored in the weather losses.

RSA’s group chief executive Andy Haste, said: “This is a strong result in what has been an extremely tough year for the industry, including the European freeze and Chilean earthquake in the first quarter and the coldest December in the UK for 100 years.

“To deliver a combined operating ratio of between 96.5% and 97% in these conditions underlines the strength and resilience of our portfolio. We look forward to 2011 with confidence and, as our guidance today shows, expect to deliver continued premium growth and strong profitability,” Haste continued.

RSA’s weather losses in November and December were £142m more than normal levels, with a full year impact £255m more than usual.

The breakdown of November and December losses include £110m in the UK, £17m across Scandinavia, £7m from Ireland, £6m in emerging markets - mainly due to Hurricane Tomas - and £2m in Italy.

RSA reported a significant increase in household claims, including 8,000 claims at an average cost of approximately £6,700 received since 1 November.

In addition, the insurer received almost 19,000 home emergency claims, around 5,500 snow claims and almost 5,700 other weather related claims.

UK call centres handled around 90% more calls than normal in December and received over 82,000 more calls than usual. Click here to read reaction from UK chief executive Adrian Brown

The group’s motor book also suffered a 70% increase in single vehicle accidents in the period from 26th November to 24th December and around 20% more accidental damage claims compared with early November.

RSA was the subject of takeover speculation earlier this week. We asked how plausible is a bid for RSA in our latest online subscriber exclusive: RSA: When the hunter becomes the hunted.