RSA premium growth led by Canada, but severe weather has impact on results

Severe weather in Canada and Europe means RSA Group is now expecting its return on equity for the year to be below 10%, the company said Tuesday.

However, the company has seen year to date growth in net written premiums of 7% to £6.7 billion. On Tuesday, £1 was equal to $1.68.

In Canada, net written premiums were up 14% to £1.34 billion.

“Premiums have grown 7% over the first three quarters,” Simon Lee, group chief executive for RSA noted in a statement. “This was led by Canada, up 14%, which continued to benefit from the 2012 acquisition of L’Union Canadienne.”

He added that the emerging markets business grew by 17%, driven by “acquisitions in Argentina in 2012 and good performances across Asia, Central and Eastern Europe and the Middle East,” while Scandinavian premiums remained flat.

Net written premiums in the United Kingdom and Western Europe grew 3%.

“2013 is proving to be an exceptionally tough year for weather events for the Group,” Lee also noted. “Over the summer we saw the worst and the third worst natural catastrophe insurance events on record in Canada, followed by continued adverse weather across the country during the third quarter.

“More recently, Northern Europe suffered a severe windstorm on 27 and 28 October. Our priority has been to provide the support our customers need to get back on track as quickly as possible.

“Assuming no further major weather events in 2013, we now expect the impact of adverse weather across the Group to be around 1.5% points above our planning assumption. We now anticipate 2013 return on equity to be below 10%.”