RSA’s restructuring has left the insurer leaner and cleaner

RSA Insurance (RSA) has flourished in the wake of last year’s restructuring, which saw most of its overseas operations sold off. The last two planned disposals – Russia and Latin America – were completed in the reported period. With operations now focused on Scandinavia, Canada, Ireland and the UK, there has been a marked performance improvement resulting in a first-half rise in underwriting profits of 72 per cent. RSA is also on track to deliver over £350m of gross annualised savings by 2018.

And while weather-related claims were up from the previous year, the core group combined ratio, stating claims as a percentage of premiums, improved from 96.4 per cent to 94.3 per cent.

In the UK, which accounts for around 40 per cent of all business, net written premiums were flat, reflecting a decision to exit from certain unprofitable lines and a disciplined approach to underwriting, while rate increases averaged 2 per cent. Restructuring in Scandinavia boosted underwriting profits from £16m to £96m, with a 4 per cent fall in written premiums at constant currencies offset by a 3 per cent rise in rates. Profits from Canada dipped from £56m to £37m reflecting the cost of the Alberta wildfires. Inevitably, investment income fell as a result of low bond yields.

Analysts at Panmure Gordon are forecasting net tangible assets for the year to December 2016 of 271p a share (from 279p in 2015).