Half-year profits drop by 24%
The UK business of RSA has suffered an £85m blow to the top line, chief executive Adrian Brown has admitted.
The insurer’s half-year results show that the UK net written premiums of £1.3bn were down 3% on 2008, with the combined operating ratio slumping to 97.4% from the 96.2% of 2008. Personal premiums were down 1% to £543m, while in commercial the overall premiums were down 4% to £796m.
“In the UK for the first six months of this year, the economic downturn cost us about £85m in the top line. That is a mix of exposure reduction in our commercial business, which showed things like liability and property down about 5% year on year, and construction down 15-17%,” said Brown.
“Even if we renewed all the existing business we had, the prices would go down broadly 5%.”
Brown said that there had been some growth in specialty lines, including risk solutions, which was up 25% and marine, up 12%.
The group said it would continue to take action on rates, increasing personal motor rates by 5%, household by 4%, and commercial rates by 7% in liability, 6% in property and 9% in motor.
Overall, the group’s profits plunged 24% to £301m for the first six months of the year from the £395m it posted for the first half of 2008. Net written premiums, however, were up 4% to £3.5bn from the £3.3bn of 2008.
Group chief executive Andy Haste said that the company was well positioned to take advantage of market opportunities. He remained confident of its ability to continue delivering sustainable, profitable performance.
“As it stands today, we expect to achieve a combined operating ratio for 2009 of about 95%. The outlook is positive and this is reflected in the 7% increase in the interim dividend to 2.92p,” he said.