RSA confident despite weak annual results

INSURER RSA said it was on track for “excellent” results in future amid continued economic uncertainty after its annual profit fell a less than expected 10 per cent, held back by a weaker investment performance.

RSA, Britain’s biggest commercial insurer, said it had a 2009 operating result of £77m, down from £867m in 2008, but ahead of the £729m consensus forecast by analysts.

RSA, best known for its More Than motor and home insurance brand, offered an upbeat outlook, saying it was confident of its ability to deliver “excellent results”.

RSA chief executive Andy Haste said the company is currently prioritising international and emerging markets acquisitions, but declined to specify how big its targets are.

RSA said it was held back in 2009 by a nine per cent drop in its investment income as returns on cash assets fell. The company said investment income will fall in 2010 by a further nine per cent, to £540m.

It expects a 2010 combined operating ratio – claims and expenses as a proportion of revenue, a key profit driver – of 95 per cent, little changed from 94.6 per cent last year. RSA is paying a total dividend of 5.33p per share, an increase of seven per cent.