Insurer RSA first-half operating profit rises 13%

LONDON (Reuters) - British insurer RSA RSA.L posted an above-forecast operating profit of 349 million pounds in the first half, helped by strong performance in Scandinavia and its other regions, it said on Thursday.

Operating profit came in at 339 million pounds, according to a company-supplied consensus forecast.

Best known in Britain for its “More than” brand, RSA also has large operations in Canada, Ireland and Scandinavia.

Statutory profit before tax fell 7% to 211 million pounds, however, hit by the impact of the coronavirus pandemic on markets.

“The recovery path from the pandemic itself is not yet certain, as well as its human and economic consequences, ” Chief Executive Stephen Hester said.

“Nevertheless, we see good prospects for RSA remaining resilient and emerging strongly from this period.”

Combined ratio, a measure of underwriting profitability, was 92.2%, in line with a forecast 92.5%, while for Scandinavia it was 83.2%. A level below 100% indicates a profit.

Net written premiums fell 3% due to the impact of COVID-19 to 3.2 billion pounds, in line with forecasts.

Shore Capital analysts described the results as “strong”, reiterating their “buy” rating on the stock.

RSA said it expected to pay 47 million pounds in eligible business interruption claims.

RSA is one of eight insurers in a court case, due to conclude on Thursday, over disputed policy wordings for business interruption insurance.

The Financial Conduct Authority says insurers should pay businesses affected by the coronavirus pandemic, but the insurers say the pandemic is not covered. RSA did not comment on the case on Thursday.

After suspending its final dividend for 2019, RSA said it was not paying an interim dividend, but hoped to resume dividends by the time of full year results, and to catch up on missed dividend payments over time.

Reporting by Carolyn Cohn, editing by Sinead Cruise