Royal & Sun Alliance Insurance Group plc, the parent of Royal & SunAlliance USA, reported a solid first-quarter operating result of $227 million, matching last year’s Q1 result of $231 million (160 million pounds and 163 million pounds, respectively, on a UK reporting basis with an exchange- constant rate of 1.42).
Unlike the first quarter of 2001, which benefited from a low volume of weather-related claims, the good start to 2002 is more directly related better underwriting results and a sound performance across the worldwide Group’s commercial and direct personal lines of business.
On a worldwide basis, the Group’s first-quarter combined ratio (the ratio of expenses plus claim payments to premiums) improved to 104.2 percent in 2002, from 105.7 percent for the first three months of 2001 and 108 percent for first-quarter 2000. Royal & SunAlliance USA’s combined ratio for the current-year quarter was 102 percent vs. 104.5 percent for the corresponding period last year.
“We’re very pleased with our first-quarter performance, which showed significant improvement across our U.S. operations,” Terry Broderick, President and CEO of Royal & SunAlliance USA, remarked. “Our commercial businesses posted strong results in our property, package and automobile accounts, while our personal businesses benefited from both increased rates and a lower level of large losses.”
Globally, net written premiums for the company’s property/casualty business, which includes Royal & SunAlliance USA, were $2,873 million (2,023 million pounds) for the first three months of 2002 vs. $3,222 million (2,269 million) for the same period in 2001a decrease resulting in large part from a one-year quota share reinsurance partnership with Munich Re. On an underlying basis, worldwide property and casualty insurance premiums grew by 16 percent.
The U.S. operation’s net written premium result also was impacted by the quota share agreement, decreasing to $830 million for 1Q 2002 from $898 million for the corresponding period in 2001. This change masked a solid improvement in revenues, which stemmed in part from strong rating actions across the U.S. organization. These rating actions also contributed to a firm underwriting result for the enterprise.
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