RSA in Ireland posts a €2.23m profit for half-year

The Irish arm of British insurer RSA posted a £2m (€2.23m) profit for the first half of the year, while shares in the overall group eased following a lower-than- expected dividend payment.

The Irish arm saw net premiums rise 1% to £152m in the six months to the end of June, compared with a £1m loss in the same period of 2016. And RSA reiterated it is targeting full-year profitability in Ireland for the whole of 2017.

The RSA Group posted an operating profit of £360m (€402m) with strong performances in Scandinavia and Canada, but shares dropped more than 2% as the interim dividend was below the forecast. However, the shares which fell slightly, are 11% up this year.

The Irish results come as premiums for motorists and homeowners continue to soar. A report from the Central Bank last month showed average premiums for comprehensive cover increased by 9% to €500 in 2015, while third-party, fire and theft cover increased by 19% to €663.

RSA said regulatory pressures, high costs of claims and other market factor contributed to high premiums in Ireland as well as the UK.

“In Ireland, we continue to target a return to operating profit for the full year 2017, although the market remains challenging, in particular for claims inflation,” the insurer said. It pumped €237m into its Irish business as an accounting scandal in 2013 showed it had not set aside enough reserves to cover large claims.

Earlier this year, UK accounting watchdog the Financial Reporting Council, announced fines of over £200,000 (€223,000) for three former RSA Ireland workers.

RSA has been selling businesses and cutting costs under Stephen Hester, the former boss of Royal Bank of Scotland, who joined in 2014 to overhaul the company.

RSA said its restructuring was now complete. Hester said the company was still on track to offer further cash to shareholders in 2018 through special dividends or share buybacks. Group underwriting profit for RSA’s business in the UK dropped nearly 80% to £17m following an unexpected large cut in the rate used to calculate personal injury claims, pushing up the size of those payments. n Additional reporting Reuters