RSA Insurance shrinks Irish losses to £16m

Scandal hit insurer aims to return to profitability in 2016

British insurer RSA shrunk its Irish losses to £16m (€23m) in the first half of the year, down from £65m in 2014, as it noted that “remediation continues” at its Irish arm.

However Stephen Hester, group chief executive, said that while losses are coming down in Ireland, it is " with some uncertainty remaining as claims patterns mature".

The insurer is the subject of a potential takeover bid by Zurich Insurance Group, and a deal would cap a tumultuous two-year period for RSA after an accounting scandal in Ireland led to Simon Lee's departure as group CEO, a stock sale and a spate of asset disposals.

Net written premiums for Ireland stood at £130m for H1, down from £152m for 2014 on a constant currency basis. Personal premiums were down 11 per cent, whilst commercial premiums were up by 2 per cent.


Looking to the full year, RSA said that its goal for its Irish operation remains to deliver “significantly reduced underwriting losses in 2015, and then to return the business to profitability in 2016 through continued underwriting improvement and cost reduction”.

At group level RSA reported a jump in first-half profit that beat analyst estimates and restored the interim dividend.

Operating profit rose 84 per cent to £259 million. That compares with the £231 million average estimate of 13 analysts provided by the company. Interim dividend was reinstated at 3.5 pence per share.

“We are making fundamental improvements to RSA, as promised,” Mr Hester said. “These interim results show excellent progress on all key measures. The foundations are being laid to improve still further.”

RSA surged by the most in almost two decades last week after Zurich said it was considering a bid, stirring speculation it may attract other offers.

Zurich, which also reported earnings on Thursday, said it was still considering a bid adding that an acquisition could “bring significant benefits.”

Group net written premiums fell 3 per cent to £3.4 billion as the insurer sold off units. The group combined operating ratio, a measure of profitability, improved to 96.9 per cent from 100.3 per cent a year ago.

(Additional reporting Bloomberg)

Fiona Reddan

Fiona Reddan

Fiona Reddan is a writer specialising in personal finance and is the Home & Design Editor of The Irish Times