UK-based RSA reported an “encouraging start” for 2013 in its Interim Management Statement with premium growth in the first quarter of the year up 7 percent and net asset value up 5 percent in the quarter to 112 pence [$1.74] per share, a combined operating ratio of better than 95 percent and a projected return on equity of 10-12 percent for 2013.

The statement gave the following figures: – Net written premiums up 5 percent to £2.3 billion [$3.58 billion]; – Scandinavia flat at £694 million [$1.08 billion]; – Canada up 18 percent to £359 million [$558.74 million]; – Emerging Markets up 16 percent to £325 million [$505.82 million]; – UK & Western Europe up 1 percent at £952 million [$1.482 billion]; – IGD surplus strong at £1.3 billion [$2.023 billion]; coverage remains at 1.9 times. — Economic capital surplus of £1.2 billion [$1.867 billion] at 99.5 percent calibration. – Net asset value (excluding IAS 19 pension deficit) up 5 percent to 112 pence per share from 107 pence [$1.665] as of December 31, 2012).

Group Chief Executive Simon Lee commented: “We entered 2013 with good momentum. It has been an encouraging start to the year for the Group with reported premium growth of 7 percent. We believe there are significant opportunities to drive further value across the Group.

“The growth in net written premiums reflected good customer retention together with continued robust rating action. Growth has been led by Canada which has benefited from the 2012 acquisition of L’Union Canadienne but has also delivered strong organic growth of 7 percent.

“Emerging Markets grew by 16 percent benefitting from the acquisitions in Argentina in 2012 and good performances across Asia, Central and Eastern Europe and the Middle East.

“Scandinavian premiums were flat while the UK & Western Europe grew 1 percent as we continue to focus on improving performance in the UK and in Italy.

“I remain confident in our ability to achieve our targets for 2013 of good premium growth, a combined ratio of better than 95 percent, and return on equity of 10-12 percent.”

The statement also noted that there “was strong growth in Canada and Emerging Markets with lower growth in the UK & Western Europe, reflecting continued active management of the portfolio.

“Our Global Specialty Lines business has grown by 4 percent at constant exchange to £414 million [$644 million] with good growth in Risk Managed and Construction & Engineering, RSA said.

“We remain focused on the ongoing active management of the portfolio. Ten years ago the Group operated in around 50 countries. Since then, the Group’s focus has narrowed and RSA now operates a well-diversified portfolio in 31 countries. Where we do not see a route to achieve target returns on capital, we take the necessary action. As a result, we exited the Czech Republic in 2012 and completed the sale of our business in the Dutch Caribbean in April 2013. We continue to expect the business to grow both organically and through selective bolt-on acquisitions.”

RSA also explained that in 2013 the company is “focused on the integration of the acquisitions we made in 2012 in Canada and Argentina. Our guidance for 2013 remains unchanged and we are confident in delivering good premium growth on a constant exchange rate basis, a combined operating ratio of better than 95 percent, investment income of around £470 million [$731 million] and return on equity of 10-12 percent for the full year 2013.

“All of our businesses are on track to achieve performance in line with the expectations laid out at our 2012 preliminary results in February. We are committed to a series of investor briefings for 2013 and 2014 to provide more detail to the market on the significant opportunities we see across RSA. The first of these briefings will take place on 12 June 2013 and will cover our Canadian business.”

Source: RSA