RSA Insurance profits fall as takeover nears

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RSA Insurance (LON:RSA) said the impact of lockdowns and other restrictions meant non-COVID-19 claims were down sharply across its lines of business in 2020.

Non-COVID-19 claims frequency was down vs the prior year in a range of 9-34%, it said in a statement with results for the year to end-December 2020.

The FTSE 100 insurer said this helped to offset lower investment income, lower premiums and also the cost of COVID-19 claims.

RSA was involved in a test case brought by hundreds of small businesses and the FCA over whether business interruption cover included COVID-19.

In January, the UK Supreme Court ruled in favour of the policyholders.

RSA said it has increased its gross loss provision as a result of the judgment but after reinsurance it does not expect its net losses to be above its previous GBP259mln provision level.

The insurer added it had provided for GBP250mln in specific COVID-19 claims in 2020, while the pandemic had reduced premiums by GBP166mln.

Profits for the year ended December 2020 fell 5% to GBP364mln in spite of a bumper year for its underwriting profits, rising 45% as its combined ratio improved by three percentage points.

RSA has agreed to a GBP7.2bn joint takeover from Scandinavian business Tryg and Canadian firm Intact.

The offer is on track to complete in the coming months, ending a chapter for RS,” said chief executive Stephen Hester.

There is no final dividend due to the offer.


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