Most insurance companies have held strong during financial results season, reporting impressive full-year 2020 numbers. However, few can boast of the significant leaps in business reported today by RSA Group.
The group’s business operating result stood at £751 million for the year – that’s a 15% jump from its 2019 performance. In addition, its group underwriting profit was up 36% to stand at £550 million, with the combined ratio looking healthy at 91.1%.
“Underwriting profits are sharply up to new record levels and return on tangible equity has risen above our target range,” said group chief executive Stephen Hester.
“Naturally, the impact of COVID-19 was the major feature of our year, as for society as a whole. We prioritised the safety of our employees and sustaining service to customers. The group paid out some £4.6 billion in ‘normal’ claims while also providing for over £250 million in COVID-19 specific claims, together with offering a range of other customer support measures.
“The group has delivered on large parts of our ‘best in class’ ambitions. The quality of earnings is excellent which augurs well for RSA’s prospects in 2021 and beyond. I am proud of the hard work, dedication and focus of all my colleagues in what was a difficult and turbulent year.
In terms of its individual businesses, the operating business results stood at: Scandinavia £337 million; Canada £256 million; UK & International £200 million. In terms of COR, Scandinavia stood at 83.2%; Canada at 88.3%; and UK & International 96.7%. The UK & International figure came in at 98.5% including exits. Its personal lines (56% of net written premiums) combined ratio was 86%, while the commercial lines combined ratio was 97% (44% of net written premiums).
However, perhaps the biggest question looming over RSA is not so much “what happened?” as “what happens next?”
The recommended bid for RSA by Intact in consortium with Tryg was approved by shareholders in January and the company commented that “good progress” was being made in satisfying the various conditions to closing. It expects the deal to be sealed in Q2 this year.
“We have built a high performing company and 2020’s results showcase the value creation thereby achieved,” added Hester. “This in turn drove the 52% premium we were able to negotiate in Q4 through an all-cash bid from Intact and Tryg. The offer is on track to complete in the coming months, ending a chapter for RSA but not the whole story.”