RSA: RSA Insurance Group Plc: RSA announces completion of latest pension scheme valuations and agreement with Trustees on future

  RSA: RSA Insurance Group Plc: RSA announces completion of latest pension
  scheme valuations and agreement with Trustees on future funding

UK Regulatory Announcement


  RSA announces completion of latest pension scheme valuations and agreement
                       with Trustees on future funding

RSA Insurance Group plc (RSA) and the Trustees of its main UK pension schemes
today announce that they have agreed the pension deficit funding contributions
following the completion of the latest triennial actuarial valuations.

As at 31 March 2012, the main UK schemes, Royal Insurance Group Pension Scheme
(“RIGPS”) and the SAL Pension Scheme (“SALPS”) were c93% funded on the prudent
measure that the Trustees are required to use, with a combined deficit of
£442m. This compares to a combined deficit of £692m at 31 March 2009.

Guaranteed deficit funding contributions of c£61m p.a. will be paid in 2014,
2015 and 2016. This compares with deficit funding contributions of c£70m in
2012 and c£63m in 2013.

In accordance with IFRS reporting, this agreement will have no impact on the
financial reporting of the Group. The Group will adopt the new IAS19 Pension
Accounting rules when it reports 2013 Interim Results on 1 August 2013.

Richard Houghton, Chief Financial Officer of RSA, commented:

“We are pleased to have worked with the Trustees to agree a funding schedule
which recognises the strength of RSA, our continuing commitment to support the
provision of pension benefits to members and allows us to manage our pension
risk and continue to de-risk at the appropriate time in the future.”

Peter Webster and Keith Greenfield, Trustee chairmen of the main UK pension
schemes, added:

“Both Trustee Boards are happy that the level of funding secured strikes the
right balance between member security and the schemes’ interests in
maintaining a healthy employer. The funding schedules are consistent with our
fundamental objective of ensuring the schemes are able to meet their long term



Analysts & Investors       Press
Matt Hotson                 Louise Shield
Tel: +44 (0) 20 7111 7212   Tel: +44 (0) 20 7111 7047
Rupert Taylor Rea           Jon Sellors
Tel: +44 (0) 20 7111 7140   Tel: +44 (0) 20 7111 7327

Notes to Editors:

In recent years, significant action has been taken to de-risk RSA’s UK pension
schemes. This has meant that the schemes are in a much more stable,
sustainable position. The de-risking activity included:

  *In 2002, closing the defined benefit schemes to new members and
    introducing employee contributions,
  *In 2005, beginning to hedge market exposure via an extensive programme of
    interest rate and inflation swaps,
  *In 2006, closing out all final salary liabilities for past service and
    moving to career-average revalued earnings (CARE) for future service,
  *In 2007, reducing equity exposure from 46% to 28% by selling approximately
    £900m of equities
  *In 2009, the group insured £1.9bn or just over half the pensions in
    payment with Rothesay Life, via a synthetic buy-in, thereby reducing the
    schemes’ exposure to longevity and market risk
  *In 2010, retaining CARE with further reductions to future service
    benefits, increased employee contributions, increased retirement age and a
    cap on earnings eligible for defined benefit

About RSA

With a 300 year heritage, RSA is one of the world’s leading multinational
quoted insurance groups. RSA has major operations in the UK, Scandinavia,
Canada, Ireland, Asia and the Middle East, Latin America and Central and
Eastern Europe and has the capability to write business in over 140 countries.
Focusing on general insurance, RSA has around 23,000 employees and, in 2012,
its net written premiums were £8.4 billion.

Important Disclaimer

This press release 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.


RSA Insurance Group Plc
Press spacebar to pause and continue. Press esc to stop.