RSA Group reports combined ratio of 91.7% in Canada for 2015

RSA Group has reported a record underwriting profit in Canada for 2015, with a combined ratio of 91.7% for the year, compared to 98.6% in 2014. The core Group combined ratio was 96%, an improvement from 98.8% in 2014.

RSA Group released its 2015 preliminary results on Thursday, reporting a Group operating profit of 523 million pounds, up 43% from 2014 at 365 million pounds. The company said in a press release that it had record current year underwriting profits in 2015, despite floods in the United Kingdom, where it is headquartered. The Group’s 2015 current year underwriting profit was 129 million pounds, compared to 73 million in 2013.

Underwriting profit was up 437% in 2015 from the prior year. While the Group operating profit was 523 million pounds, in Canada, the profit was 182 million pounds. In 2015, the Group underwriting profit was 220 million pounds, compared to 41 million pounds in 2014, with “strong underlying results” across Scandinavia, Canada and the U.K.

Core Group premiums were up 1% last year, while overall Group net written premiums of 6.8 billion pounds were down 3%. As well, weather and large losses were 68 million “worse than planned and 20 million pounds better than 2014”; net cost of the December weather events was 76 million pounds.

“2015 was a year of major achievement for RSA,” said Stephen Hester, RSA Group chief executive. “As a result, the turnaround phase of our action plan is largely complete and we have good prospects of substantial further performance improvement.”

Hester added that the company is increasing its “annual gross cost savings target to over 350 million pounds by 2018 and raising our underlying return on tangible equity expectation to the upper half of our 12-15% target range by 2017, with further improvement to come thereafter. We see 2016 as the last major restructuring year with disposals and balance sheet work completing and the heavy lifting of core business improvement and cost reduction action continuing. We expect challenging markets and to rely on self-help to progress. Despite these headwinds, we face the future with determination and confidence.”