RSA Canada performed well during the fourth quarter of 2016, according to the RSA Group’s overall financial results. For the period ending Dec. 31, 2016, the Canadian division increased underwriting profit and recorded a decent combined ratio for 2016. The company says this was a good performance through a challenging year that involved the Fort McMurray wildfire.
“We’re very, very pleased with the result we’ve produced in Canada and at the end of 2016,” Martin Thompson, president and CEO of RSA Canada, said Thursday during a telephone press conference.
“We faced quite a challenging year, given Fort McMurray and some adverse weather trends throughout the year. Despite all of that, we were still able to achieve a combined ratio of 94.9%, which is in line with our expectations and an underwriting result of $133 million,” representing a 6% increase year-over-year, Thompson (pictured below) reported.
“Our underlying loss ratio, which is really the thing we would count as an acid test of whether we’re good underwriters or not.”
Fort McMurray was the costliest insurance event in Canadian history. It cost the insurance industry around $4 billion as nearly 3,000 homes were lost and hundreds of commercial buildings razed to the ground. Fortunately, the fire did not claim any lives, although it displaced 80,000 people for over a month.
Despite this, RSA Canada managed to perform will. The report mirrored the overall results for the RSA Groups:
- operating profit increased 25% from £523 million in 2015 to £655 million in 2016;
- record underwriting profit was up 73% from £220 million to £380 million;
- current-year underwriting profit rose 110% from £129 million to £271 million (volatile weather/large loss items, however, were 0.3 points higher than 2015 at core group level); and
- core group premiums were up 6% to £6.3 billion in 2016, although down slightly on an underlying basis.
“We did not do any of those things on the back of unusually good weather or unusually high prior-year reserves,” he said.
“We did that on the back of a combination of three years of very hard work in improving our business, improving our underwriting and our loss ratios, improving our expenses, working hard to make our customers happier and it’s paying off,” he argued.