RSA says 'good' Q1 underwriting results to drive operating profits

Net written premiums were down slightly quarter-on-quarter to £1.57bn from £1.59bn.

Group weather event costs £23m which represents 1.5% of net earned premiums against 2.3% last year and planning assumptions of 3%). The overall group weather ratio was 1.5%, down from 2.6%.

Large losses were £142m, representing 9.5% of net earned premiums against 8.5%. The overall group large loss ratio was 8.5%, up from 2015's 7.5%.

“During the first quarter we saw positive prior year profit emergence ahead of planned levels, though likely to remain volatile on a quarterly basis,” RSA said.

It added that headline figures benefited from benign weather but underlying results also continue the improving trends visible in 2015.

“Insurance market conditions are broadly unchanged from 2015. Slow growth and strong competition drive sharp price/volume trade-offs, in line with our expectations overall,” the company said.

“Financial market volatility was elevated in Q1. Notable were significant intra-quarter movements in equities and in credit spreads which widened significantly during the first two months, before partially retracting in March (and narrowing further still in April). Government bond yields fell across our core markets.”

“Sterling depreciated around 7% against our major international currency blocks but has since strengthened somewhat and remains potentially volatile as the UK’s EU referendum date comes closer.”