Premium income falls in UK but grows elsewhere

RSA announced foreign sales in Q1 had help boost its premium income as UK sales stalled despite price rises of more than 5%.

Financial highlights

  • Net written premiums of £1.9bn up 8%
  • IGD surplus of £1.7bn and coverage of 2.4 times
  • Net written premiums £1,852m, up 8%
  • International net written premiums of £1,001m up 12%
  • UK net written premiums of £652m down 1%
  • Emerging Markets net written premiums of £195m up 20%

Andy Haste, Group CEO of RSA, said: “Our first quarter net written premiums have again demonstrated the resilience of our strong and diversified portfolio. We are, as expected, seeing the effect on premiums of the current challenging conditions, however, we have taken action to mitigate this including continuing to push hard on rate. We also continue to take action on expenses and are making good progress towards meeting our targets in Scandinavia and the UK. The Group’s financial position remains strong, reflecting our high quality, low risk investment strategy and robust capital position and we are confident of delivering a strong result in 2009.”

RSA said: “The UK remains a competitive market with overall premiums of £652m down 1% on last year. The team have delivered a good performance and we remain well positioned with our balanced product and distribution strategy.

“In Commercial, premiums of £389m were 2% down on last year, with a strong performance in Risk Solutions offsetting lower premiums in large Commercial Motor schemes. In Personal lines, premiums decreased by 1% to £263m, with new affinity deals offsetting lower new business levels related to mortgage origination and car sales.

“We continue to take the right action on rate to mitigate the economic downturn and have again achieved a 6% rate increase in Personal Motor and 5% in Household. In Commercial, we have pushed rate hard and achieved increases of 6% on Liability, 7% on Property and 11% on Motor. Retention remains strong across the UK at around 80%.