RSA net written premiums down as shake-up continues
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(Reuters) – Britain’s RSA Insurance Group P.L.C. said premiums fell in the first quarter of the year, reflecting tough trading conditions in core western European markets and the impact of a turnaround plan that has seen some businesses sold off.
In a trading statement on Thursday, RSA said the headline fall in underlying net written premiums was 9% from a year earlier to £1.98 billion ($3.36 billion) for the quarter.
The company is in the middle of a root and branch shake-up steered by new Chief Executive Stephen Hester, after weather-related losses and accounting irregularities at its Irish arm hit its finances, prompting the departure of several senior executives.
In February, the company began a drive to raise up to £1.6 billion ($2.7 billion) in capital and tapped shareholders for around half in a rights issue that wrapped up in April.
The "Action Plan" also involves disposing of noncore assets and streamlining the remaining operations.
RSA has already secured the sale of operations in the Baltics and Poland and said it expects to announce more disposals during 2014.
The company said it expects premiums could be up to 10% lower for the full year as a result of the disposals.
Mr. Hester said premiums and profits trends remained in line with expectations, though market conditions were challenging and the company had much to achieve in its turnaround notwithstanding "intense activity" in the first quarter.
"There remains much to do and we operate in a challenging and competitive market place. 2014 is a foundation year, but one where we hope to make solid progress," he said.
Bad weather in core markets cost the insurer £111 million ($187.3 million), of which £60 million ($101.3 million) was attributed to the U.K., where the quarter started with widespread flooding and winter storms.
An earthquake in Chile in April is likely to have cost RSA £15 million to £20 million ($25.3 million to $33.8 million), the company added.
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