TIDMRSA
RNS Number : 2531C
RSA Insurance Group PLC
28 September 2018
RSA Insurance Group plc
Q3 2018 Trading Update(1)
28 September 2018
RSA reports a strong Q3 in its international businesses but poor
UK underwriting results drive a disappointing quarter overall
Group net written premiums for Q3 discrete up 4%(2) versus the
prior year
Large and weather losses above expected levels in Q3 overall,
but particularly elevated in the UK
Stephen Hester, RSA Group Chief Executive, commented:
"RSA's international businesses performed well in Q3, making
strong progress against our best-in-class ambitions. However, our
UK and 'London market' business reported an underwriting loss which
is disappointing. Actions to improve in the UK are well underway
and we are determined to restore satisfactory performance whilst
continuing our progress internationally."
Trading update(1)
Market conditions
-- Insurance and financial market trends are largely unchanged
versus H1 2018 in RSA's territories.
Premiums
-- Group Net Written Premiums year-to-date of GBP4.9 billion up
c.1%(2) net of changes in reinsurance(3) but down 2%(2) at a
headline level
-- Regional premium trends comparable to H1. Growth in areas
where underlying profitability is positive, tempered by the impact
of pricing and portfolio remediation actions where required
-- In Scandinavia, attractive growth continues in Swedish
Personal Lines with policy counts, retention and rate all
contributing
-- Positive trends continue in Canada with Johnson, Personal
Broker and Commercial premiums all up in a hardening market
-- UK premiums remain lower than 2017 as pricing and re-underwriting action is taken.
Profitability
-- Pre-tax profit for the year-to-date higher than 2017 but
lower on an underlying basis due primarily to elevated weather
costs
-- Preliminary underwriting result for Q3 discrete:
- The Group's international businesses performed strongly in Q3
with combined ratios of c.84% for Scandinavia, c.94.5% for Canada,
c.88% for Ireland and c.81% for the Middle East
- The UK and London market business made an underwriting loss of
c.GBP70m (combined ratio c.110%) with higher weather, large losses
and attritional claims. The Marine portfolio was the hardest
hit
-- Year-to-date underwriting trends:
- Weather losses have been higher than last year in all regions
but particularly in Canada and the UK; Group weather ratio c.4.6%
(five year average: 3.2%; Q3 2017: 2.4%)
- Large losses in the UK are better than last year (despite Q3
spike) and a little worse in Canada and Scandinavia; Group large
loss ratio c.11% (five year average: 9.0%; Q3 2017: 11.3%)
- Attritional loss ratios year-to-date in all regions are
broadly consistent with the prior year(5) . Q3 deterioration in the
UK reflects improvements in Household and Commercial Property which
were more than offset by deterioration in Motor and Marine
- Controllable expense ratio continues to reduce
- Prior year development in line with H1
-- Retention ceiling now reached on Group aggregate reinsurance
cover, providing protection for individual losses over GBP10m in
Q4
-- Investment income consistent with improved guidance issued in August 2018.
Capital
-- The Group's Solvency II coverage ratio at the end of Q3 is
expected to be around 172% (31 December 2017: 163%).
1 Results reported in this update are subject to the
finalisation of quarterly reporting processes and controls; they
are therefore preliminary
2 At constant exchange
3 Reinsurance changes amount to c.GBP180m and mainly comprise
the triennial renewal of the Group's aggregate volatility cover
4 The Group uses Alternative Performance Measures, including
certain underlying measures, to help explain business performance
and financial position. These measures have been calculated
consistently with those for the 6 months ended 30 June 2018 and
reconciliations will be provided with the condensed consolidated
financial statements for the year ended 31 December 2018
5 Ex. the impact of reinsurance changes
The information contained within this announcement is deemed to
constitute inside information under the Market Abuse Regulations
(EU) No 596/ 2014 ("MAR")
Enquiries:
Investors & analysts Press
Kerry McConnell Natalie Whitty
Group Director of Investor Relations Group Head of External Communications
Tel: +44 (0) 20 7111 1891 Tel: +44 (0) 20 7111 7213
Email: kerry.mcconnell@gcc.rsagroup.com Email: natalie.whitty@gcc.rsagroup.com
Laura de Mergelina
Investor Relations Manager
Tel: +44 (0) 20 7111 7243
Email: laura.demergelina@gcc.rsagroup.com
Conference call for analysts and investors
A conference call for analysts and investors will be held at
08:30am on Friday 28 September to discuss the Q3 Trading Update.
Participants should call +44 (0)800 358 9473 (toll free) or +44
(0)33 3300 0804, using participant pin code 25571429#. A recording
will be available via the company website (www.rsagroup.com).
Important disclaimer
This press release and the associated conference call may
contain 'forward-looking statements' with respect to certain of the
Group's plans and its current goals and expectations relating to
its future financial condition, performance, results, strategic
initiatives and objectives. Generally, words such as "may",
"could", "will", "expect", "intend", "estimate", "anticipate",
"aim", "outlook", "believe", "plan", "seek", "continue" or similar
expressions identify forward-looking statements. These
forward-looking statements are not guarantees of future
performance. By their nature, all forward-looking statements are
inherently predictive and speculative and involve risk and
uncertainty because they relate to future events and circumstances
which are beyond the Group's control, including amongst other
things, UK domestic and global economic business conditions,
market-related risks such as fluctuations in interest rates and
exchange rates, the policies and actions of regulatory authorities,
the impact of competition, inflation, deflation, the timing impact
and other uncertainties of future acquisitions or combinations
within relevant industries, as well as the impact of tax and other
legislation or regulations in the jurisdictions in which the Group
and its affiliates operate. As a result, the Group's actual future
financial condition, performance and results may differ materially
from the plans, goals and expectations set forth in the Group's
forward-looking statements. Forward-looking statements in this
press release are current only as of the date on which such
statements are made. The Group undertakes no obligation to update
any forward-looking statements, save in respect of any requirement
under applicable law or regulation. Nothing in this press release
shall be construed as a profit forecast.
The information contained within this announcement is deemed to
constitute inside information under the Market Abuse Regulations
(EU) No 596/ 2014 ("MAR")
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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