Bad weather sees threefold increase in insurance claims

Three times as many weather-related claims were made by customers of RSA Insurance’s Irish business in the first half of the year than in the same period last year, on a percentage basis.

The abnormally poor weather in the first quarter of the year contributed to a tough first half of 2014 for the insurer which yesterday reported interim underwriting losses for its Irish business of £64m (€80.6m).

Of this total, £35m relates to current year losses with a prior year loss of £29m accounting for the remainder.

The company’s Irish current year losses were made up of £15m of expected underwriting losses, £13m of adverse current year claims experience, and weather costs of £7m.

Accounting for 8.6% of total first-half claims, the weather losses were more than three times that of the same period in 2013 and ahead of the five-year average of 5.8%.

RSA said its “remediation work” was ongoing and expected the measures to restore the business in this country to profitability in 2015.

“On pricing we have applied strong rate increases during 2014 in key lines requiring remediation, with year-on-year rate increases of circa 20% in motor and circa 15% in liability.

“As a result of this focus, premiums in the first half were down 16%,” the company’s interim report reads.

Having appointed Ken Norgrove as chief executive of its Irish unit in March, the insurer said it was continuing to make good progress in filling critical management vacancies but expected further, albeit lower, losses in the second half of 2014.

Overall, RSA reported a pre-tax profit of £69m across its operations and said the “modest profits” of the opening six months reflected further balance sheet and reserve clean-up, as well as above normal weather costs.