RSA Insurance posts jump in operating profit ahead of takeover

RSA Insurance posted a rise in full-year operating profit on Friday ahead of its takeover.

In its preliminary results for 2020, the insurer said operating profit rose 15% to £751m. Underlying pre-tax profit was also 15% higher, at £718m, while statutory pre-tax profit fell 2% to £483m, driven by "market impacts from Covid-19, bid costs, exits and restructuring".

RSA said the estimated net impact of the pandemic from premiums, claims and investment income effects is a £42m drag on profit.

The insurer is currently in the process of being taken over by Denmark's Tryg and Canada's Intact Financial in a £7.2bn deal.

The company’s combined operating ratio improved to 91.1% from 93.6% in 2019. A ratio below 100 indicates the insurer is making an underwriting profit, while a ratio above means it is paying out more in claims than it gets from premiums.

Chief executive Stephen Hester said: "We are pleased to report excellent results for RSA in 2020. Underwriting profits are sharply up to new record levels and return on tangible equity has risen above our target range.

"Naturally, the impact of Covid-19 was the major feature of our year, as for society as a whole. The group paid out some £4.6bn in 'normal' claims whilst also providing for over £250m in Covid-19 specific claims, together with offering a range of other customer support measures."