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RSA Insurance boosted as as profits and underwriting quality improve

Written premiums were flat due to planned repricing in UK, but profits are looking up thanks to weather and attritional losses shrinking

RSA Insurance Group -
The insurer's written premiums were flat at £4.9bn

Shares in RSA Insurance Group PLC (LON:RSA) found gains on Thursday as the insurer said its profits and underwriting quality improved in the first nine months of the year.

In a trading update on Thursday, the FTSE 100-listed company revealed that its written premiums were flat at £4.9bn in the year-to-date as a 3% decline in its UK segment wiped out gains of 4% and 2% respectively in Canada and Scandinavia.

READ: RSA Insurance gets a boost as it reports first quarter rise in profit and premiums

The insurer's planned repricing in the UK also resulted in an £8mln restructuring charge being booked in the last three months.

Underwriting quality improved, however, with weather losses accounting for 2.6% of net earned premiums, down from 2.7% last year thanks to a quieter season in the UK, and a broad improvement in non-catastrophe losses.

Stephen Hester, RSA’s chief executive called the results strong, saying that underwriting has “sharply improved”, with all its regional businesses contributing. 

But, Hester added: “There is lots more to do - not least to finish 2019 well, with momentum into next year."

In a note to clients, analysts at Shore Capital said that RSA's large loss ratio - “often a weak point" - which shrank to 9.9% from 11.2% in the same period last year, bodes well for the group’s profits.

The analysts repeated a ‘hold’ rating on RSA, saying: “If this can be maintained, the results for 2019F should be on track to meet targets.”

RSA shares were up 3.2% to 549p in early trading on Thursday.

Quick facts: RSA Insurance Group

Price: 570.2 GBX

Market: LSE
Market Cap: £5.88 billion

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