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RSA Insurance sees ‘Beast from the East’ hit its first-half operating profits

The FTSE 100-listed firm posted a 15% fall in its operating profit for the six months to 30 June 2018 to £304mln, own from £360mln, with the costs from adverse weather in the period £53mln in excess of the five-year average
RSA boss Stephen Hester
Underwriting profit fell 23% to £171mln, while net written premiums were down by 5% to £3.2bn on a constant currency basis

RSA Insurance PLC (LON:RSA) saw the severe winter weather earlier this year hit its first-half operating profits, while net written premiums also fell.

The FTSE 100-listed firm posted a 15% fall in its operating profit for the six months to 30 June 2018 to £304mln, own from £360mln, with the costs from adverse weather in the period £53mln in excess of the five-year average.

READ: RSA profits hit by winter weather but shares rise as gross written premiums gain

The group saw its underwriting profit fall 23% to £171mln, while net written premiums down by 5% to £3.2bn on a constant currency basis, and its combined ratio weakened to 94.7%, down from 93.2% in 2017.

RSA said group weather costs were £155mln in the first half, or 4.9% of net earned premiums, with Canada the most affected region with a weather ratio of 10%, twice the annual average.

The company said, in the UK & Ireland, Storms Eleanor and Emma – the latter known as the 'Beast from the East' – cost it an estimated £47mln pre-tax.

RSA chief executive Stephen Hester said: “First half underwriting results were below our ambitions due to adverse weather costs.

“On an underlying basis we showed areas of excellent performance, however, and with much we can continue to improve."

He added: "We enter the second half of 2018 with confidence, while mindful of market challenges."

The firm increased its interim dividend by 11% to 7.3p a share, up from 6.6p a year earlier.

In early morning trading, RSA shares were 0.7% lower at 637.2p.

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