Share Search
Visit the Share Search
RSA sees smaller-than-expected hit from Covid-19
7th May 2020 07:46
(Sharecast News) - RSA Insurance Group said it would face net claims of ?25m from the coronavirus pandemic, well below analyst estimates as it reported first quarter results.
RSA said the payouts covered travel-related and wedding insurance claims and added the majority of business interruption claims were not expected to be eligible under their coverage terms for Covid-19. Analysts had expected a net impact of ?60m from Covid-19 during 2020.
That included travel claims, with estimated costs of ?16m gross of reinsurance, claims for wedding cancellation with an estimated reserve of ?7m, and claims under certain business interruption and related coverages with an estimated claims reserve of ?17m.
There would likely be an increase in bad debt from customers, the company said, adding it was actively working with those in most need on payment spreading plans.
Chief executive Stephen Hester said RSA was "resilient" and "very conscious of our shareholder responsibilities, especially with regards to restarting dividend payments when it is prudent to do so"".
For April, claims frequency was down on the prior year in the range of 20% to 55% across the company's three regions, mostly reflecting Covid-19 impacts on activity levels.
Group net written premiums totalled ?1.52bn for the first quarter, down 1% year-on-year excluding exits and in line with guidance.
The group's estimated solvency ratio fell to 151% from 168% at the end of December, reflecting Covid-19 driven market impacts and planned pension contributions.
Group weather costs were 3.7% of net earned premiums, up from 3.2% year-on-year and slightly better than its expectations for the quarter, as weather costs were better in Canada and worse for the UK and international division, due to February flooding in the UK.
RSA said the payouts covered travel-related and wedding insurance claims and added the majority of business interruption claims were not expected to be eligible under their coverage terms for Covid-19. Analysts had expected a net impact of ?60m from Covid-19 during 2020.
That included travel claims, with estimated costs of ?16m gross of reinsurance, claims for wedding cancellation with an estimated reserve of ?7m, and claims under certain business interruption and related coverages with an estimated claims reserve of ?17m.
There would likely be an increase in bad debt from customers, the company said, adding it was actively working with those in most need on payment spreading plans.
Chief executive Stephen Hester said RSA was "resilient" and "very conscious of our shareholder responsibilities, especially with regards to restarting dividend payments when it is prudent to do so"".
For April, claims frequency was down on the prior year in the range of 20% to 55% across the company's three regions, mostly reflecting Covid-19 impacts on activity levels.
Group net written premiums totalled ?1.52bn for the first quarter, down 1% year-on-year excluding exits and in line with guidance.
The group's estimated solvency ratio fell to 151% from 168% at the end of December, reflecting Covid-19 driven market impacts and planned pension contributions.
Group weather costs were 3.7% of net earned premiums, up from 3.2% year-on-year and slightly better than its expectations for the quarter, as weather costs were better in Canada and worse for the UK and international division, due to February flooding in the UK.