RSA reports difficult H1 in Irish market

Thursday 07 August 2014 09.01
RSA's CEO Stephen Hester says turnaround plan ahead of schedule
RSA's CEO Stephen Hester says turnaround plan ahead of schedule

Insurer RSA bounced back to profit in the first half of the year and said it was ahead of schedule in its turnaround plan under the helm of recently appointed CEO Stephen Hester. 

After weather-related losses and accounting irregularities at its Irish arm hit its finances last year, Hester has set about raising money to fix the firm's balance sheet and sell off non-core assets. 

The company today reported an interim pretax profit of £69m after recording a loss of £494m a year earlier, and said it was making "good progress" in stabilising its financial health. 

Net written premiums fell to £3.9 billion in the six months to the end of June, down 9%, weighed by performance in the UK and Western Europe. 

Premiums in Scandanavia rose 2%, in line with RSA's expectations, while Canadian premiums fell 2%. 

The company added that it was planning to restart paying a dividend at the full-year results.

RSA reports difficult H1 in Ireland

RSA today reported an interim Irish underwriting loss of £64m, of which £35m relates to the current year and £29m to prior-year losses as the "clean up" continues. 

It said it hopes to be profitable in Ireland by next year as it admitted that the first six months of 2014 had been "difficult".

It noted that it has been increasing prices significantly ahead of the market across much of its book as it continues to remediate the business here. 

The insurer said its current year underwriting loss of £35m in its Irish operations includes £15m of expected underwriting loss, £13m of adverse current year claims experience and an above-average weather cost of £7m.

"RSA's Action Plan is going well. Since announcing it five months ago, we have made strong progress improving strategic focus and capital health. Good work is also underway on cost, portfolio actions and the management line-up to drive future performance," CEO Stephen Hester said in today's results statement.