PROFIT UP 24% FOR H1 AT RSA INSURANCE, ON NWP UP 9% YEAR ON YEAR

UK-based RSA Insurance has reported a first-half post-tax gain of £190m ($287m) for the first half, up from £153m in the same period last year, on net written premiums of £4.65bn, up from £4.28bn in H1 2012. The underwriting result improved to £188m, from £149m. Under the new RSA Insurance dividend regime, the interim was reduced to 2.28p a share from 3.41p, on basic EPS of 5.0p, up from 4.1p. Group CEO Simon Lee said that the results demonstrated "continued progress and the benefits of our diversified business model". He noted that, despite a £48m impact from the Alberta floods, RSA Insurance still recorded a combined ratio of 94.2%, a 1.2pp improvement on the same period last year. While the combined ratio in Canada deteriorated to 98.7%, from 91.7%, and in Scandinavia to 87.7% from 83.1%, in the UK & Western Europe it improved to 95.4% from 101.8%, and in Emerging Markets it improved to 97.8% from 99.8%. The Scandinavian division's profit declined to £98m from £130m, but it remained the most significant contributor to RSA Insurance's underwriting performance. In Canada profit declined to £15m from £62m. Emerging Markets improved to £12m from £7m, but the biggest improvement was in UK & Western Europe, where a loss of £41m in H1 2012 was turned into a profit of £50m in H1 2013. Group Re improved from a loss of £9m to a gain of £13m. A spike in interest rates at the end of the half meant that NAV per share declined by 1%. Large losses contributed 7.2pp to the ratio (H1 2012: 7.3%), broadly in line with long term averages and the company's expectations for 2013. Prior year releases once again benefited the CR by 3.3pp. The investment result declined 8% year on year to £206m, but RSA Insurance said that investment income of £256m was "comfortably in line with full year guidance of £470m". Looking ahead, RSA Insurance said that it remained on track to meet the guidance issued in February – a combined ratio of less than 95% and a return on equity of 10% to 12% – although the floods in Alberta will impact the Canadian full-year result.