RSA's nine-month pre-tax profits up 97%

RSA's nine-month pre-tax profits up 97%

	Published : Thu, 10 Nov 2005 19:40 By : Andrew Stead Print this Story

LONDON: Royal & SunAlliance Insurance Group Plc. posted a 97 per cent increase in its pre-tax profits at 488 million pounds for the nine-month period ending 30 September compared with the corresponding previous year period. The company had overall growth in its main markets and reduced losses in U.S. operations.

The increased profits reflected a 10 per cent increase in net written premiums, which stood at 4.1 billion pounds. Its premiums recorded an 11 per cent increase in Canada and Latin America, and a 9 per cent increase in Scandinavia. In the main U.K. market, premiums were up a moderate 4 per cent to 2 billion pounds.

The sale of its Japanese business for 92 million pounds last year had helped in the profits, the company said. It also reduced its pension deficit by 126 million pounds in July as British employees opted for a change in the plans.

RSA's chief executive Andy Haste said he hoped to have the full-year group combined operating ratio to come in ahead of its earlier target of 96-97 per cent. The combined operating ratio is a measure of underwriting profitability, which expresses claims and expenses as a proportion of premium income.

Britain's second largest insurer said in its efforts to exit the U.S., it had reduced the number of outstanding claims by 29 per cent since the beginning of the year. The company had stopped taking new business in the U.S. in 2003 after the controversial asbestos-related claims. It is now mulling sale of the division. Towards this objective, it sold its non-standard auto unit to Sentry Insurance Group for about $200 million. In June, the company had agreed to sell its 20 per cent stake in the Rothschild family's U.K. investment bank for $185 million to free up funds for its main business.

Though it had only limited exposure to the hurricane related claims, the company said it expected to absorb an insured loss of 14 million pounds from Hurricane Katrina, down from an initial estimate of 25 million pounds.

For the third quarter, the company's net income went up to 183 million pounds against a loss of 74 million pounds in the year-earlier period. Net written premiums rose to 1.27 billion pounds from 1.22 billion pounds.