Insurer RSA said it suffered greater-than-expected weather losses in the first quarter due to harsh conditions in key markets such as the UK and Canada, but the market was undaunted with shares up by nearly three per cent this afternoon.
In its first quarter results announcement this morning RSA said that gross written premiums were up one per cent to £2.099bn on a constant currency basis and in line with the same period last year at reported rates.
Net written premiums were £1.517bn, up two per cent on an underlying basis.
However, weather costs were 5.1 per cent of net earned premiums. That was 3.1 points higher than the same quarter last year and higher than the five-year average of 3.2 per cent.
Large loss ratio improved to 9.7 per cent, nearing the five-year average of nine per cent.
It said that pre-tax profits were up on constant currency, but lower on an underlying basis due to winter weather costs not being offset by other improvements.
RSA's share price was up nearly three per cent this afternoon.
Why it's interesting
Some insurers have posted improved results in the first quarter compared to last year. Underwriters such as Hiscox and Lancashire saw results improve following a 2017 which saw major natural disasters including hurricanes in the Carribbean and earthquakes in Mexico.
What RSA said
Chief executive Stephen Hester said:
We are happy with RSA's progress at this early stage of the year. The underlying business is tracking consistent with our ambitions overall, whilst winter weather volatility is a normal part of our business. Headline profits are also strongly up, reflecting the absence (as planned) of restructuring costs.
The "Beast from the East" has had an impact, but its no disaster area.