Royal & Sun Alliance Group reported a strong 22 percent gain in first quarter operating results which rose to £138 million ($239 million) net pretax over last year, led by a hefty 66 percent increase in profits from its p/c business to £148 million ($213 million). RSA’s life operations fell, however, renewing speculation that they might be for sale.
The results pleased analysts, especially the reduction in RSA’s combined ratio from 108 percent to 105.7 percent. CEO Bob Mendelsohn said the results were in line with his expectations, and was obviously pleased.
“Our Group operating result, property and casualty result, and combined ratio have all improved significantly both in comparison to this time last year and to the fourth quarter of 2000,” Mendelsohn stated. “Over the next few years, our aim is to grow our business from the strong platform we are developing and to continue our move toward products where service and expertise are true differentiators and away from those that are purely price driven.”
That goal would seem to indicate that RSA’s life business, which posted £823 million ($1.185 billion) in net new premiums for the quarter, down £20 million ($28.8 million) from last year, might well be sold off. It’s estimated to be worth around £1.8 billion ($2.6 billion).
Both GE Capital, which lost out to Halifax in acquiring Equitable Life, and Holland’s Aegon, which is seeking to expand its life and pension activities in the U.K., are rumored to be interested.
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