RSA Insurance premiums rise as Canada shines

RSA Insurance posted a 3% rise in first-quarter net written premiums on Thursday, driven largely by solid performances in Canada and Scandinavia.

Group net written premiums rose to £1.57bn on the year in the first quarter. On and adjusted basis, which takes account of planned exits, FX movements and reinsurance changes, they were broadly flat and in line with the insurer's Q1 plans.

Premium income in the UK and international was down 5%, which was broadly in line with the company's expectations and due to the impact of pricing and underwriting actions last year and this year to date.

It was a much cheerier picture in Canada, where premiums rose 8% in local currency, driven by pricing increases and continued volume growth in Personal Lines, while Commercial Lines saw a premium contraction reflecting planned underwriting actions in loss affected lines.

In Scandinavia, premiums grew 3% at constant currency, driven by the Personal Lines business.

The group said operating profit for the first quarter was up on the same quarter a year ago at constant FX and in line on a reported basis, with an improved combined ratio and slightly lower investment income.

RSA said conditions in the insurance market were largely unchanged from 2018, with market pricing competitive overall. It said financial markets did produce some headwinds during the quarter, and the reduction in bond yields and credit spreads, if sustained, has an impact on future investment income and a short-term volatility impact on UK pension accounting.

Chief executive Stephen Hester said the results were in line with the group's "demanding plans" for the period.

"While still early in the year, extensive underwriting actions are also on track, responding to 2018's challenges. We remain focused on delivering positively for customers and shareholders in 2019," he said.

At 0905 BST, the shares were up 1% at 539.80p.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "It speaks volumes that RSA has been able to keep premiums, combined operating ratios and operating profits steady or growing during a cyclical squeeze for the general insurance market. It’s testament to the group’s excellent leadership, and a geographically diversified model that’s able to smooth lumps and bumps of individual markets.

"The relative benign start to the year, compared to the Beast from the East last year, was a welcome boost but also totally outside the group’s control. General insurers are always hostages to fortune to some extent, but good cost control is a more replicable positive. After a challenging 2018, it looks like this year is getting off to a good start."