2017 Interim Results: chief executive's statement

RSA Group


Another half year of outperformance

RSA is pleased to report another half year of outperformance. But we are not relaxing. There is much more we aim to improve—for both customers and shareholders. Competitive markets and our own raised ambitions will demand no less.

Across RSA's markets, conditions are essentially unchanged versus 2016 though with many variations by business line and geography. We are carefully watching inflation trends, notably in the UK. Testing competition and, occasionally, volatile loss trends create underwriting challenges which we must continue to address more crisply as capabilities improve.

RSA's restructuring efforts were completed by the £834m sale of UK legacy liabilities announced in February, and the subsequent repurchase and refinancing of capital instruments. Taken together these actions reduced risk, boosted capital resilience and increased future earnings. They leave us with undiluted focus on the pursuit of high performance in our continuing businesses.

Our best-in-class ambitions are being pursued through companywide efforts to improve customer service and underwriting skills, and to reduce operating costs.

Net written premiums grew 11% in the period, with higher retention and new business adding to pricing and FX gains. Although top line growth is not our highest priority, it is nevertheless pleasing that customers are responding to the improved capabilities we are deploying.

While underwriting results will always be ‘noisy’ over short periods, we are pleased with continuing progress, and a combined ratio of 93.2% is our best on record.  In terms of volatile items, better than planned weather costs were offset by higher than usual large losses. Attritional loss ratio improvement continued with an H1 ratio of 54.9% vs 55.2% for H1 2016 at constant FX.

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Stephen Hester talks through the highlights of RSA's 2017 interim results

Cost efficiency remains crucial for all businesses in our industry. RSA continues to track ahead of our plans in this regard, with gross cost reductions of 8% (CFX) vs prior year.

The strength of our regional line-up also showed well in the period. Our Scandinavian business contributed a majority of underwriting profits with strong underlying advances and above trend prior year profits. Canada did well also, despite higher large losses. Our Irish business returned to profit. Our UK business had the toughest time with Ogden costs, above plan large losses and challenges in household loss ratios. But, excluding Ogden, results were in-line with our plan even here.

2017 first half good news

The first six months of 2017 have been positively memorable for many other reasons

Today we published “strong first half results” showing that RSA is making real progress towards our best-in-class ambitions.

But as well as good financial results, the first six months of 2017 have been positively memorable for many other reasons.

We introduced our UK customers to the ultra-cool (fictional) founder of MORE TH>N. We helped Danish parents learn how to lower the threat to their children’s safety when they’re online. And we got down and dirty on Canadian beaches, by taking part in the Great Canadian Shoreline Clean-up.

For more stories that have made us smile so far this year, read on…

  • Woof! What a picture!

    In response to finding out that more and more UK pet owners are taking their pooches on holiday with them, MORE TH>N launched the world’s first passport photo booth exclusively for dogs. The ‘paws-port’ booth was opened in London in June. Read more…
  • Introducing Mordenn Surenns

    May saw the arrival of Mordenn Surenns – the ultra-cool, fictional founder of MORE TH>N – on UK screens in a series of television advertisements. Watch them here (YouTube)…
  • Promoting online safety

    A hugely successful online campaign by Codan used shock tactics to alert Danish parents to just how easily hackers can gain access to their children’s computers and phones, and importantly, what they can do to lower the risk. Learn more about the campaign…
  • Big-hearted

    Colleagues from RSA Canada and Johnson offices across the country swapped screens for garbage bags as part of the coast-to-coast Great Canadian Shoreline Cleanup campaign. Across the pond, volunteers donated over 1,500 hours to local charities as part of UK Volunteers’ Week 2017. See our volunteers in action at #RSAvolunteers (Twitter)… 

  • Green shoots in marine

    In April, RSA Belgium was appointed as the lead insurer for Greenyard’s marine cargo business. Greenyard is a global market leader in fresh, frozen and prepared fruit and vegetables.

  • A boost for brokers

    UK insurance brokers got a digital treat when RSA Commercial Risk Solutions (CRS) launched Business Combined, a new e-traded product, in March. Read more…

    And in the same month, we were delighted to congratulate 12 more graduates from our Platinum Broker Leader Programme. Read more…
  • And the award goes to…

    Leading the pack in the industry awards stakes, RSA UAE won a whopping nine awards including overall Best Insurance Company in the MENA region.

    And it was a triple win for our UK business at the British Insurance Awards, including the coveted Major Loss Award for our part in getting the McVitie’s (United Biscuits) Caldewgate biscuit factory up and running following a devastating flood in December 2015. Read more…


Across RSA improvement programmes are continuing to deliver.  Our digital capabilities are improving, with notable advances in digital claims and policy servicing.  New, more sophisticated underwriting and pricing models continue to roll out.  Cost programmes around automation, site consolidation, lean methodology, outsourcing and zero-based budgeting are all progressing.

Overall, RSA is in good health.  We have much to do.  We will fall short in areas.  But we nevertheless expect to make continued good progress in pursuit of sustained outperformance.

Stephen Hester
Group Chief Executive

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