More Than parent RSA Insurance has reported a 14% plunge in annual profits as Britain’s pre-Christmas snow and extreme conditions worldwide sent weather claims soaring £255 million more than normal.
Snow damage and burst pipe claims left it with UK claims of £110 million more than expected in November and December alone, with severe conditions globally and the Chilean earthquake adding to its bill.
The group, which has about a 6% share of the UK household insurance market, posted pre-tax profits of £474 million in 2010, down from £554 million in 2009.
It said its UK result was “disappointing”, with underwriting losses of £95 million against profits of £75 million in 2009 as the weather claims offset premium rate hikes.
It increased motor insurance rates by 19% on average and household insurance by 5% and said it “continues to take action” on rates.
Overall, the value of premiums rose by 11% in the UK to £2.9 billion in 2010.
But its combined operating ratio (COR) – an industry measure of claims and costs as a percentage of premiums, where anything below 100% is a profit – hit 102.2% in the UK as weather claims took their toll.
The group hopes to return to an improved result in the UK this year after the unusually cold weather before Christmas. However, it plans to focus on its international division and emerging markets.
Shares in RSA fell 2%, but analysts at Numis Securities said the group’s outlook was positive.
They said: “RSA expects premium income growth of 10% in international and double-digit growth in emerging markets. We also think the UK business is well-positioned for growth as trading conditions improve given its cautious stance in recent years.”