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FTSE 100 home and motor insurer RSA’s strong momentum from 2016 carried on into the new year, with operating profits in the first quarter again ahead of its targets after beating forecasts last year.
The company has been undergoing a three-year turnround which culminated with a £1bn reinsurance deal with Enstar to cover legacy liabilities earlier this year, and it said its “entire focus is now on our drive for outperformance”.
Premium income in the first three months of the year was 14 per cent higher than the same period in 2016, at £1.7bn. The figures were boosted the weak pound, with earnings up 4 per cent at constant exchange rates.
Premiums grew in the company’s three largest markets of Scandinavia, the UK and Canada, as well as in the Middle East, but were flat in Ireland and declined when the impact of currency moves is removed.
Shares in the company climbed 2.1 per cent at the start of trading.
The company said changes to UK rules governing compensation for serious injuries would cost it around £40m, but said the impact “was more than offset by positive reserve development elsewhere in the group”.
The changes to the so-called Ogden rate will mean victims of UK road accidents will receive far higher compensation payouts, and led rival UK insurer Direct Line to cancel plans to pay a special dividend earlier this year.
Stephen Hester, RSA chief executive, said:
The year has begun well for RSA. Results to date are strong with key proof points for further progress coming through positively.