London-listed insurer RSA reported a 14 percent rise in first-quarter net written premiums on Thursday and said operating profits were ahead of plan, sending its shares higher.
Best known in Britain for its More Than brand, RSA has been selling businesses and cutting costs under Chief Executive Stephen Hester, former boss of RBS, who joined in 2014 to overhaul the motor and home insurer.
“We’ve made a very good start to the year,” Hester said on a media call, though the company did not disclose profit numbers in a shortened first-quarter statement.
“The company has returned to growth after three years of restructuring.”
Group net written premiums rose to 1.71 billion pounds ($2.20 billion), up 14 percent on a reported basis and up 4 percent on a constant currency basis.
Its Canadian business saw the biggest rise in premiums, a 28 percent gain on a reported basis.
Volume increases accounted for half of the premium growth on a constant currency basis and rate increases for the other half, RSA said.
Low weather-related losses helped underwriting performance, RSA said in a trading statement.
“Weather experience was relatively benign across the group, with the exception of Canada which saw the impact of windstorms across Newfoundland and Ontario in March.”
The firm took a further 40 million pound [$51.7 million] charge, however, due to changes to the UK discount rate used to calculate lump sum payments in personal injury claims, which have pushed up the size of the payments.
This follows a 45 million pound [$58.1 million] charge in the firm’s 2016 results.
RSA’s shares were up 2.4 percent to 619 pence at 0702 GMT, compared with a 0.5 percent rise in the FTSE 100 index.
Barclays analysts reiterated their overweight rating on the stock, saying premiums came in ahead of its estimates, and that the company’s “stretched 2018 ambitions are looking increasingly achievable.”
($1 = 0.7765 pounds) (Reporting by Carolyn Cohn; editing by Greg Mahlich and Jason Neely)
[Editor’s Note: RSA does not report operating profits in its Q1 statement].
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