The UK’s RSA posted a solid operating profit of £684 million [$1.047 billion], compared to £727 million [$1.113 billion in 2011; while registering a five percent increase in net written premiums to £8.353 billion [$12.786 billion], with a combined ratio of 95.4 percent, slightly up from 94.9 percent in 2011.

Other highlights for the period were listed as follows:
• Underwriting result flat at £375 million [$574 million] (2011: £375 million) including negative impact from UK adverse weather and Italian earthquakes in first half
• Investment income of £515 million [$788 million] (2011: £579 million [$886 million]), ahead of 2012 guidance
• Emerging Markets now represents 10 percent of insurance result
• Acquisitions in Canada and Argentina completed
• Return on equity of 9.1 percent (2011: 11.5 percent)
• IGD surplus of £1.2 billion [$1.837 billion]; covering capital requirement 1.9 times
• Economic capital surplus of £1.2 billion at 99.5 percent calibration
• Net asset value per share excluding pension deficit of 107 pence [$1.63] (2011: 108p [$1.65)
• Strategy is delivering – expecting to achieve 10-12 percent ROE in 2013
• Continued growth in premiums as business expands in Emerging Markets, Canada and Global Specialty Lines
• Further improvements to combined ratio anticipated as reshaping in UK, remediation in Italy and operating leverage in Emerging Markets deliver
• Expect to deliver strong premium growth, a COR of better than 95 percent, around £470 million [$719 million] of investment income and return on equity of between 10 and 12 percent in 2013
• Confident in prospects for further improvements to ROE and COR in medium term
• Final dividend of 3.90 p [$5.96] per share

Group Chief Executive Simon Lee commented: “These are a solid set of results, demonstrating strong progress in challenging market conditions. We’ve seen good growth in premiums up 5 percent to £8.4 billion. Operating profits of £684 million have been impacted by the Italian earthquakes, extreme wet weather in the UK in the first half of the year and falling bond yields.

“We are continuing to execute our strategy of global growth while maintaining profitability and underwriting quality. In 2012 over 65 percent of our premiums were from outside the UK and as we move more of the business towards higher growth and higher margin markets, we are optimistic about our future growth prospects.

“We are confident that we can deliver sustainable and ongoing improvements in the combined ratio and return on equity through management actions and we are not dependent on economic or market recovery to deliver these plans.”

He also pointed out that RSA now has “leading market positions in Scandinavia, Canada, Latin America, Ireland and the UK. These are attractive general insurance markets where we are either already delivering or will deliver strong returns on capital. Where we do not see a route to achieve target returns on capital we will take decisive action.

Source: RSA