RSA slashes 17% of NWP despite rate increases
RSA has reported a 17% drop in net written premium (NWP) for the UK over Q1 2014 as it continues to be more disciplined in its underwriting approach.
NWP totalled £604m over the first three months of 2014, compared to £726m for the same period in 2013. Most of this cut came in commercial lines where NWP fell 22%, compared with 11% in personal lines.
In its UK motor book, personal lines NWP fell by 44% over the quarter, with premiums totalling £64m for the three months (Q1 2013: £107m). In addition, the insurer has also cut the number of UK personal motor brokers it deals with.
Commercial motor dropped by 66% to £49m from £143m over Q1 2013.
The insurer has also suffered from increased weather costs relating to the winter storms. RSA booked £60m over Q1 2014 because of weather claims, and also strengthened reserves by £10m in relation to the December storms.
RSA group chief executive Stephen Hester said: “During the quarter we have taken action to address underperforming portfolios, the results of which can be seen in our IMS today. Underlying premium and profit trends are generally in line with our expectations. Poor weather in the UK, Ireland and Canada negatively affected first quarter profits.”
This drop in premiums comes despite overall rate rises for the insurer.
Personal household business saw the biggest rise, up 9%, while commercial liability and commercial motor were up 5% and 4% respectively.
But Hester said the insurer still had much work ahead as it sought to turn around its fortunes.
“There remains much to do and we operate in a challenging and competitive market place,” he said. “2014 is a foundation year, but one where we hope to make solid progress. Our priorities will be consistent: to serve customers well; operate with capital strength; and focus on driving shareholder value.”
The insurer confirmed that it still sought to exit underperforming lines over 2014, and in the UK it has already cancelled its arrangement with Ford and closed its eChoice offering.
At a group level, RSA plans to sell further business units in addition to the Polish and Baltic operations it sold in April.