Insurer reports UK premium pressure

RSA said income from UK premiums continued to fall in the third quarter of the year

More Than insurer RSA said income from UK premiums continued to fall in the third quarter of the year, despite hiking rates by up to 8%.

The group - Royal & Sun Alliance until a rebrand last year - said it pushed through average renewal rate rises of 7% for personal motor insurance and 4% for household cover.

Its commercial customers were hardest hit, with annual rate rises of 8% across the board for motor, liability and property insurance.

But the increase failed to mitigate a 5% plunge in net written premiums in the commercial arm in the first nine months of the year as the recession impacted business customers and dented their demand for insurance.

The poor commercial performance offset a 1% rise in personal insurance premiums, taking the total for the UK to £1.98 billion in the nine months so far, down from £2.03 billion a year earlier.

RSA said: "The trading environment remains challenging, with economic conditions leading to reductions in exposures and premiums across the majority of our markets.

"To mitigate this we continue to push hard on rate, target profitable growth and exercise tight operational and financial management."

It announced plans in February to cut 1,200 roles to save money and confirmed 1,050 of these job losses have been identified, with 650 having already left the business.

RSA's performance has been better in overseas markets, such as Canada and Scandinavia, where premiums rose 13% and 5%, also boosted by the weakness of the pound.

This helped lift total group net written premiums by 4% to £5.03 billion, although it saw a 1% fall with currency benefits stripped out.