RSA Q3 2019 Trading Update

RSA Group


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%)


1 At constant FX, adjusted for 2019 reinsurance changes, portfolio exits and premium restatements (Scandinavia only)

The Solvency II capital position at 30 September 2019 is estimated

Conference call for analysts and investors

A conference call for analysts and investors was held at 08:30am on Thursday 7 November. Listen to a recording of the call

Investor and media enquiries

Important disclaimer

This press release and the associated conference call may contain ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial condition, performance, results, strategic initiatives and objectives. Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. By their nature, all forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group’s control, including amongst other things, UK domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation or regulations in the jurisdictions in which the Group and its affiliates operate. As a result, the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in the Group’s forward-looking statements. Forward-looking statements in this press release are current only as of the date on which such statements are made. The Group undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable law or regulation. Nothing in this press release shall be construed as a profit forecast.


For a fuller picture of our 2019 strategy and performance...