2012 PRELIMINARY RESULTS
20 February 2013
RSA DELIVERS 5% GROWTH IN PREMIUMS, £684M OPERATING PROFIT AND COMBINED RATIO OF 95.4%
Solid performance, 5% growth in net written premiums
- Net written premiums up 5% on constant exchange rate basis to £8,353m
- Underwriting result flat at £375m (2011: £375m) including negative impact from UK adverse weather and Italian earthquakes in first half; combined operating ratio of 95.4% (2011: 94.9%)
- Investment income of £515m (2011: £579m), ahead of 2012 guidance
- Emerging Markets now represents 10% of insurance result
- Acquisitions in Canada and Argentina completed
- Operating profit of £684m (2011: £727m); Return on equity of 9.1% (2011: 11.5%)
Balance Sheet remains strong with healthy capital surplus
- IGD surplus of £1.2bn; covering capital requirement 1.9 times
- Economic capital surplus of £1.2bn at 99.5% calibration
- Net asset value per share excluding pension deficit of 107p (2011: 108p)
Strategy is delivering – expecting to achieve 10-12% ROE in 2013
- Continued growth in premiums as business expands in Emerging Markets, Canada and Global Specialty Lines
- Further improvements to combined ratio anticipated as reshaping in UK, remediation in Italy and operating leverage in Emerging Markets deliver
- Expect to deliver strong premium growth, a COR of better than 95%, around £470m of investment income and return on equity of between 10 and 12% in 2013
- Confident in prospects for further improvements to ROE and COR in medium term
Recommendation to rebase dividend. Final dividend of 3.90p per share
- Reflects prospects of prolonged low bond yield environment
- Creates sustainable dividend and progressive dividend policy for the future consistent with the anticipated underlying growth in earnings
- Final dividend of 3.90p per share (2011: 5.82p). Board anticipates similar percentage reduction in 2013 interim dividend
