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UPDATE 1-Insurer RSA first-half operating profit rises 13%

Thu, 30th Jul 2020 08:03

(Adds detail, CEO comment)

By Carolyn Cohn

LONDON, July 30 (Reuters) - British insurer RSA
posted an above-forecast operating profit of 349 million pounds
($452.44 million) in the first half, helped by strong
performance in Scandinavia and its other regions, it said on
Thursday.

Operating profit came in at 339 million pounds, according to
a company-supplied consensus forecast.

Best known in Britain for its "More than" brand, RSA also
has large operations in Canada, Ireland and Scandinavia.

Statutory profit before tax fell 7% to 211 million pounds,
however, hit by the impact of the coronavirus pandemic on
markets.

"The recovery path from the pandemic itself is not yet
certain, as well as its human and economic consequences, " Chief
Executive Stephen Hester said.

"Nevertheless, we see good prospects for RSA remaining
resilient and emerging strongly from this period.”

Combined ratio, a measure of underwriting profitability, was
92.2%, in line with a forecast 92.5%, while for Scandinavia it
was 83.2%. A level below 100% indicates a profit.

Net written premiums fell 3% due to the impact of COVID-19
to 3.2 billion pounds, in line with forecasts.

Shore Capital analysts described the results as "strong",
reiterating their "buy" rating on the stock.

RSA said it expected to pay 47 million pounds in eligible
business interruption claims.

RSA is one of eight insurers in a court case, due to
conclude on Thursday, over disputed policy wordings for business
interruption insurance.

The Financial Conduct Authority says insurers should pay
businesses affected by the coronavirus pandemic, but the
insurers say the pandemic is not covered. RSA did not comment on
the case on Thursday.

After suspending its final dividend for 2019, RSA said it
was not paying an interim dividend, but hoped to resume
dividends by the time of full year results, and to catch up on
missed dividend payments over time.
($1 = 0.7714 pounds)
(Reporting by Carolyn Cohn, editing by Sinead Cruise)

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