Amid a wave of results from the insurance industry, RSA has stated that it would be reviewing its London commercial business. According to Reuters, this move might lead to an exit if it stops bringing in money after the group’s showing of a 1% rise in operating profit in its half-year results.
The insurer pulled out of several lines of business already, including international freight and construction, after warning last year about the disappointing performance of its London-based international commercial insurance business.
“The remaining business that we have there...will stay under careful review,” RSA Chief Executive Stephen Hester said during a media call, adding it had been profitable in the first half. If profitability continued to drop, however, “we would revisit our remaining presence,” he added.
The group’s operating profit, not including exits from the commercial business, increased to £308 million, which was driven by performance in the personal lines business. In comparison, last year’s number came in at £304 million and a company-supplied analyst forecast of £306 million.
Nonetheless, with exits factored in, operating profit fell to £280 million.
RSA’s group combined ratio meanwhile improved slightly to 94.3% from 94.7%, with personal lines, such as home and motor, outperforming the commercial business. Reuters reported that Hester said the company would take a hit of £14 million to £15 million for the recent change in the Ogden rate, which requires British insurers to put aside more money than they expected to compensate the victims of serious car crashes.
RSA also has key businesses in Canada, Ireland, and Scandinavia.