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RSA Insurance Group Plc - Third Quarter 2019 Trading Update

RSA Insurance Group plc

Q3 2019 Trading Update

7 November 2019 

RSA reports pleasing progress YTD 2019 with underwriting profit strongly up.

Weather, large loss, attritional loss and controllable expense ratios all improved also.


Stephen Hester, RSA Group Chief Executive, commented:

"RSA's results to end September are strong, and consistent with our plans for the period. Current year underwriting results have sharply improved, with all our regional businesses contributing.  There is lots more to do - not least to finish 2019 well, with momentum into next year."


Trading update

Market conditions

Insurance market conditions were largely unchanged in Q3.  The markets are competitive overall, although accommodating underwriting actions in those portfolios responding to industry losses.

Financial markets continue to present challenges, particularly from lower bond yields.


  • Our focus in 2019 is to continue improving for customers; to grow our business where underwriting conditions permit; and to re-price and re-underwrite in those business lines which saw difficult results in 2018, as well as completing the portfolio exits announced
  • Group net written premiums of £4,865m were flat overall vs YTD 2018 and broadly in line with our plans. 
  • In Scandinavia, premiums grew 2%1 reflecting Personal Lines growth and portfolio actions in Danish Commercial Lines
  • In Canada, premiums increased 4%1 driven by pricing increases and volume growth in direct Personal Lines, while our broker intermediated businesses saw volume contraction reflecting pricing and underwriting actions
  • In UK & International, premium income fell 3%1 which was broadly in line with our plans and reflected the impact of pricing and underwriting actions in 2018 and in 2019 to date.



  • Operating profit for the first nine months was up, both including and excluding exit portfolios, with an improved combined ratio and slightly lower investment income (as guided)

Underwriting profit components (excluding exits):  

  • Group weather costs were 2.6% of net earned premiums (2.7% inc. exits; YTD 2018 4.7%), a little below the 5 year average. Weather costs were better than the prior year in Canada (following a relatively quiet Q3) and for the UK & International division.
  • The large loss ratio was 9.6% (9.9% inc. exits; YTD 2018 11.2%) with improvements in every region
  • The attritional loss ratio improved overall, and in each region
  • The written controllable expense ratio fell slightly overall (though rose in the UK reflecting 'top line' portfolio exit effects)
  • Prior year development was significantly lower than last year but in-line with H1 trend, absorbing the revised Ogden rate impact in UK
  • Investment income was consistent with the range guided at our 2019 Interim Results
  • Exit portfolios (expected to run-off substantially during 2019), generated a modest further loss in Q3 period
  • A UK cost reduction programme has commenced which will be described more fully with year end results.  £8m restructuring charges were booked in Q3 below the operating result in respect of this


Balance sheet and capital

  • Tangible shareholders' equity at 30 September 2019 was £3.2bn (31 December 2018: £2.9bn), driven by mark to market gains and year to date profits.  Tangible net asset value per share was 306p (31 December 2018: 279p)
  • Balance sheet unrealised gains were £506m at 30 September 2019, up £75m since the half year.  IFRS pension surplus in the UK was £287m, up £63m from half year
  • The Group's Solvency II coverage ratio was 169%2 at 30 September 2019 (31 December 2018: 170%)