BRITAIN’S largest general insurer RSA warned yesterday that last week’s wind storms in northern Europe would hit profits, the first major insurer to say so, sending its shares tumbling.
RSA said that damage from the St Jude storm in the UK and northern Europe as well as from floods in Canada this year, deemed that country’s costliest natural disaster, would mean “full year weather losses...materially above planning assumptions”.
“2013 is proving to be an exceptionally tough year for weather events for the group,” said chief executive Simon Lee in a statement.
It had said in August that it remained on track to meet full year targets after absorbing the cost of claims from Canadian floods, though it conceded the impact would continue into the second half of 2013.
“We now expect 2013 return on equity to be below 10 per cent,” RSA said, down from a 10-12 per cent expectation before the results.
The figure assumes that the effects the weather this year will add 1.5 percentage points to its expected loss ratio.
The losses overshadowed a seven per cent rise in net written premiums to £6.7bn, including a three per cent rise in the UK and western Europe to £2.8bn.
That sent RSA shares skidding 6.3 per cent, closing at the bottom of the FTSE 100 fallers’ board.