RSA warns over payouts from bad weather

 
City A.M. Reporter
Insurer RSA said losses due to bad weather in November and December had been about £142m worse than normal after Britain suffered one of the worst winters in decades.

For 2010 as a whole, the company said that the weather impact was about £255m more than it might normally expect but that RSA's policy of increasing its dividend at least in line with inflation would not be impacted by the losses.

"This is a strong result in what has been an extremely tough year for the industry, including the European freeze and Chilean earthquake in the first quarter and the coldest December in the UK for 100 years," Chief Executive Andy Haste said in a statement on Thursday.

On the upside, RSA said it expected its full year 2010 results would show net written premium growth of 11 percent and an operating profit in the range of £600m to £630m.

"Given the extreme weather in 2010, this is a strong result and reflects the diversity of the portfolio and the resilience of the group's underlying profitability," the company said.

For 2011, RSA said it expected to deliver a combined operating ratio of better than 95 percent, investment income of around 550 million pounds and total investment gains of around 50 million pounds.