RSA grew profit and earnings last year despite underlying premiums dip

 
Caitlin Morrison
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RSA surpassed expectations with its 2016 results (Source: Getty)

RSA has reported profit and earnings growth in 2016, surpassing analyst expectations with a set of results that chief exec Stephen Hester said demonstrated a "seamless" transition from transition to outperformance.

The figures

Group operating profit went up 25 per cent to £655m, from £523m last year, while underlying pre-tax profit rose to £556m from £417m.

Net written premiums dipped slightly to £6.4bn from £6.8bn, but underwriting profit grew to £392m from £245m. The insurer also improved its combined operating ratio to 94.2 per cent from 96.9 per cent.

Underlying earnings per share jumped 42 per cent to 39.5p from 27.8p in 2015.

Shares in the group jumped by more than three per cent at the open.

Why it's interesting

The FTSE-100 listed insurer outperformed analyst expectations last year - even thought net written premiums dipped, the result still came in ahead of consensus, as did the underwriting result and earnings per share.

RSA's boss hailed the end of the group's turnaround programme, after stating this time last year that the firm was almost at the finish line. The insurer brought Hester in to clean the company up after an accounting scandal in its Irish business was uncovered in 2013.

What RSA said

"In 2016 RSA took major strides forward, moving seamlessly from 'successful turnaround' to organic outperformance," said Hester.

"Our improvements are both strategic and operational. They are delivering high quality sustainable results. Our ambition now is to drive RSA’s performance towards 'best in class' levels.

"Industry and financial market conditions will remain tough. We plan to outperform through continuing self-help measures on customer service, underwriting and costs."

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