RSA Ireland posts profit for first time since 2012

Company implemented change policy after accounting hole emerged in 2013

RSA Insurance Ireland received €423 million of cash injections between 2013 and 2015 after  a large hole emerged in its balance sheet. Photograph: Bloomberg

RSA Insurance Ireland received €423 million of cash injections between 2013 and 2015 after a large hole emerged in its balance sheet. Photograph: Bloomberg

 

RSA Insurance Ireland, which was hit by an accounting scandal in late 2013, turned in a profit last year for the first time since 2012.

The company, a unit of UK-based RSA Group, generated a €10.8 million profit in 2017, as its combined operating ratio, a keenly followed gauge of net insurance claims and expenses divided by earned premiums - fell to 97 per cent from 116.1 per cent in 2016. A ratio below 100 per cent indicates that an insurer is writing business profitably.

“We are very pleased with these results which underline the value of our change programme,” said Ken Norgrove, chief executive of RSA Insurance Ireland, adding that the return to profit was “driven by a raft of underwriting and pricing actions undertaken within the organisation in recent years.”

RSA Insurance Ireland received €423 million of cash injections between 2013 and 2015 after the country’s once-largest insurer was thrown into crisis when a large hole emerged in its balance sheet. This was mainly the result of the business having been found at the time to have set aside too little money in reserve to cover large claims.

Hiked premiums

Irish insurers hiked insurance premiums by more than 70 per cent in a little over three years to September 2016, according to Central Statistics Office data, as the industry grappled with losses in the face of rising car accidents in a recovering economy and surge in the cost of claims. However, premiums have since fallen by about 16 per cent on the back of signs of stabilisation in the claims environment.

“The Irish claims environment remains volatile,” said Mr Norgrove, adding that he is supportive of various Government efforts to lower the cost of claims and insurance. “It is clear from international benchmarking studies that the claims awards environment in Ireland is still very high, and high awards will continue to feed into the cost of premiums.”

He said that the claims situation would be helped by benchmarking of awards internationally, increased powers for the Injuries Board, and improved road safety enforcement measures.