HALF YEAR FINANCIAL REPORT TO 30 JUNE 2012
Solid performance in a challenging environment
- Net written premiums of £4.3bn, up by 4% at constant exchange (2% as reported)
- Combined operating ratio (COR) of 95.2% with strong performances in Scandinavia and Canada partially offset by adverse weather in the UK and earthquakes in Italy
- Investment income of £267m and operating profit of £316m
- IGD surplus of £1.2bn; coverage remains strong at 1.9 times
- Interim dividend up by 2% to 3.41p
Good progress on strategic priorities
- Another excellent performance in Swedish Personal supported by improved profitability in Denmark and Norway
- Continued strong performance in Canada with double digit growth in Commercial led by Large and Specialty. Acquisition of L’Union Canadienne will consolidate number 3 market position and bolster footprint in Quebec
- Driving growth in UK Home, Pet and Specialty. UK Personal Motor premiums down by 19% as a result of ongoing management actions which deliver a sub-100% COR for the first time in four years
- Emerging Markets again achieves double digit growth. Bolt-on acquisitions will position RSA as a top 5 general insurer in Argentina; Czech operation closed as unable to achieve scale within a reasonable timeframe
- Global Specialty lines grew by 6% at constant exchange and by 7% on an underlying basis
- Continue to expect overseas operations to be c70% of Group premiums in 2015
Confident of delivering a good full year performance
- Following adverse weather in the first half, now expect to deliver a COR for the Group of better than 96%
- Investment income still expected to be around £500m
| 6 Months 2012 | 6 Months 2011 | Movement | |
| Net written premiums | £4,276m | £4,188m | 2% |
| Underwriting result | £158m | £206m | (23)% |
| Combined operating ratio | 95.2% | 93.2% | (2.0)pts |
| Operating result | £316m | £408m | (23)% |
| Profit before tax | £233m | £376m | (38)% |
| Profit after tax | £164m | £277m | (41)% |
| Interim dividend per ordinary share | 3.41p | 3.34p | 2% |
| 30 June 2012 | 31 December 2011 | ||
| Financial position | |||
| Shareholders' funds | £3,730m | £3,801m | (2)% |
| Net asset value per share excluding IAS 19 | 104p | 108p | (4)% |
| Net asset value per share | 102p | 104p | (2)% |
Simon Lee, Group Chief Executive of RSA, commented:
We are making good progress with our strategic priorities. Premium growth in the first half of the year was led by our focus areas of Emerging Markets, Canada and Specialty. In the UK, we've grown our core lines of Home, Pet and Commercial Property and continued to reduce volumes in Motor. In terms of profitability, our major overseas operations have again performed strongly with a COR of around 83% in Scandinavia and a record first half underwriting result in Canada. Set against this, are the adverse weather conditions experienced in the UK and the impact of the two Italian earthquakes in May. However, the overall COR of 95.2% represents a solid performance in challenging conditions.
