RSA, soon to be acquired by Intact Financial Corporation, released its financial results for the year 2020, including those of its subsidiary RSA Canada.
RSA Canada reported an operating result of 256 million pounds sterling (£M) in 2020, equal to approximately CAD$450 million.
The profit thus soared by 61 per cent or £97 million compared with 2019, when RSA Canada reported operating income of £159 million.
Combined ratio improves
RSA Canada’s combined ratio is 88.3 per cent in 2020, down from 94.5 per cent in 2019. It thus improved by 6.2 points, falling below the 90 per cent mark.
Looking at the results in closer detail:
- In personal insurance, the combined ratio was 84.9 per cent in 2020. It improved by 6.4 points compared with 2019, when it was 91.3 per cent
- In commercial lines, the combined ratio was 97.3 per cent in 2020. It improved by 5 points from 102.3 per cent in 2019. RSA explains this result by improved attrition and large losses.
Excluding the estimated impacts of COVID-19, RSA says its combined ratio in Canada is 91.4 per cent in 2020.
The components of the insurer’s operating result indicate that its underwriting profit has increased, but its investment income has decreased.
RSA Canada reported an investment profit of £57 million in 2020, or approximately CAD$100 million.
This result is a decrease of 12.3 per cent or £8 million from 2019, when RSA Canada posted an investment profit of £65 million.
Underwriting profit more than doubled
RSA Canada earned an underwriting profit of £199 million in 2020, or approximately CAD$350 million.
The corresponding increase is 111.7 per cent or £105 million over 2019, when RSA Canada’s underwriting profit was £94 million.
COVID-19: Premiums down
RSA Canada’s net written premiums reached 1.7 billion pounds sterling (£B) in 2020, or approximately CAD$3 billion. They fell by 2.5 per cent or £43 million from 2019.
This result includes “an estimated £70m of COVID-19 related customer relief measures impacting written premiums,” RSA says. The insurer mentions that these measures included “the delayed renewal of a block of travel business which has been deferred to 2021.”
Looking at the results in greater detail:
- In personal insurance, net written premiums fell by 2.4 per cent or £30 million in 2020 to £1.2 billion.
- In business insurance, net written premiums decreased by 2.7 per cent or £13 million in 2020 to £477 million.
Excluding the estimated impacts of COVID-19, RSA says its net written premiums in Canada have risen by 3 per cent on a constant exchange rate in 2020. This result was “led by growth in Johnson of 9% (of which 4% organic growth).”
Intact’s acquisition of RSA is expected to close in the second quarter of 2021.