Thursday 27 February 2020 8:16 am

RSA beats expectations on record year for underwriting profit

RSA posted a record year for underwriting profit as the insurance giant beat analyst expectations for 2019 after restructuring its international business.

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The figures

The British firm posted an operating profit of £656m, up from £517m in 2018 and ahead of forecasts of £644m.

A record year for underwriting profit was the main driver of the gain, increasing to £405m, around 60 per cent up on 2018’s £250m.

RSA said that its combined ratio, which is a key measure for underwriting profitability, was 93.6 per cent.

Earnings per share also increased from 31.8p to 32.6p, while RSA posted a final dividend of 15.6p.

Why it’s interesting

Home, motor and commercial insurer RSA, which is best known in the UK for its “More Than” brand, also has businesses in Ireland, Scandinavia and Canada.

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RSA has pulled out of several lines in its commercial insurance business, including international freight and construction, as a way of streamlining its international business.

The firm used today’s results to announce that the programme was nearly complete.

Results in commercial lines in Canada and Denmark remain poor, however.

What RSA said

Stephen Hester, RSA Group Chief Executive, commented:”We are pleased to report strong results for RSA in 2019. Our profits are up, our dividends are up and return on tangible equity is very good. This progress is driven by improved underwriting, which has produced record current year profits and combined ratio.

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“2019 was an important period for RSA. Significant management renewal and a repositioning of our UK & International division are showing good promise.

“Our groupwide focus on underwriting improvement with strong cost control proved effective. Yet there is plenty more we can do to improve each of our businesses for customers and shareholders”.