RSA Sales Increase as Emerging Markets Outweigh Flat U.K.
RSA Insurance Group Plc (RSA), the U.K.’s biggest property and casualty insurer by market value, said nine-month revenue rose 4 percent as growing demand from emerging markets outweighed flat sales in the U.K.
Net written premiums were 6.21 billion pounds ($9.9 billion) in the nine months to Sept. 30, compared with 6.13 billion pounds in the same period in 2011, the London-based insurer said today in a statement.
The company repeated its forecast for investment income of about 500 million pounds this year and estimated it will pay out less than 96 pence in claims for every pound it takes in premiums. RSA, formerly known as Royal & Sun Alliance, is seeking to write more policies in markets such as Chile, Uruguay and the Middle East to offset falling sales in Europe and stagnant growth in its home market.
“The non-life rating environment remains challenging, but RSA continues to drive rate increases through its operations,” Barrie Cornes, a London-based analyst at Panmure Gordon & Co. with a hold rating on the stock, wrote in a note to clients today. “RSA remains resilient and is well-positioned for the eventual rebound of economies and markets.”
The firm doesn’t write policies in the U.S. so wasn’t affected by Hurricane Sandy, Cornes said. The storm is estimated by Eqecat Inc. to eventually cost insurers as much as $20 billion.
Revenue from emerging markets grew 15 percent to 887 million pounds in the period, while sales in the U.K. and western Europe were unchanged at 2.73 billion pounds, RSA said. Sales in Scandinavia rose 2 percent and Canadian revenue rose 6 percent.
The stock fell 0.6 percent to 112.4 pence in London trading, for a market value of about 4 billion pounds.
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