RSA facing £50m wet weather hit

By HOLLY WILLIAMS
Published on 19/07/2012 00:00

Insurance group RSA has revealed a £50 million hit after the dire summer weather resulted in more than 6,500 claims last month alone.

The wettest June on record landed the insurer with a £40m bill, while it expects to suffer another £10m hit so far in July.

RSA, which operates in 140 countries, also revealed a £35m hit from claims relating to the two earthquakes in Italy in May.

While the UK has seen record rainfall since April, RSA said this year’s weather claims fall far short of the company’s £120m bill from the widespread flood damage seen in 2007.

The group recently reported a 17 per cent slump in premiums at its motor division during the first quarter of 2012. It is focusing on more-profitable areas in the UK, such as pet and household insurance, while operations in emerging markets are also helping offset tougher domestic markets.

RSA, which employs 23,000 staff, has major operations across Canada, Ireland and Scandinavia, as well as regions including Asia and Latin America.

The group’s combined operating ratio, which shows claims and expenses as a percentage of premium income – where a figure below 100 per cent means a profit is being made – has been affected by the recent claim losses.

It is now expected to be “better than” 96 per cent, against 95 per cent previously.