RSA cuts jobs and misses targets
by Gill Montia
Story link: RSA cuts jobs and misses targets
Royal & Sun Alliance (RSA) has warned that it does not expect to achieve its targets for 2007, despite recording better-than-expected first-half profits.
The group, which is the UK’s second-largest commercial insurer, expects claims from this summer’s floods to reach £120m.
The estimate for the June floods in Yorkshire stands at £55 million and the July floods in Gloucestershire, at £65 million.
As a result, underwriting profits decreased by 16% in the six months to the end of June 2007, to £144 million.
This will impact on the company’s target of a combined operating ratio of at least 95%, for 2007.
RSA posted operating profits of £403 million for the first six months of the year, a figure well above analysts’ forecasts.
It has also achieved annual costs savings of £130 million ahead of schedule, having reduced its workforce by around 6%.
However, further jobs losses are expected, as part of a cost-reduction programme aimed at making savings of £70 million.
In the UK, up to 500 jobs could go, with a further 200 likely to be cut overseas.