ANNUAL REPORT AND ACCOUNTS 2012 - RSA, Annual Report ...

CANADA
We are Canada’s third largest general insurer,
and with our latest acquisition, L’Union Canadienne,
the insurer with the broadest national Personal
and Commercial proposition
“This was another solid year
for Canada, strengthening
our number three position
in the market with topline
growth of 8%”
Rowan Saunders,
Chief Executive, Canada
STRATEGY
In Canada, our strategy is to deliver
sustainable, profitable growth:
• Maintaining leading positions in segments
where we have strong technical
knowledge and expertise;
• Extracting value from strategic acquisitions
that provide us with scale in desirable
geographic and specialty markets;
• Delivering differentiated propositions and
targeted solutions to our broker partners
and customers; and
• Fostering world-class broker relationships.
2012 OVERVIEW
In 2012, our Canadian business continued
to perform strongly through a combination
of acquisitions and organic growth despite
challenging market conditions.
Net written premiums grew by 8% at
constant exchange (9% as reported) to
£1,614m, driven by strong organic growth,
particularly within Commercial lines, and
acquisitions, most notably L’Union Canadienne
in the province of Quebec. The underwriting
result was a robust £98m (2011: £116m) and
the COR was 93.7% (2011: 91.6%) despite
another year of above average severe
weather, and the specific strengthening
of prior year reserves in Personal Motor.
Through a series of acquisitions in
recent years, our Canadian business
is now positioned as the insurer with
the broadest national Personal and
Commercial proposition in Canada.
Commercial lines
Net written premiums grew by 11%
(at both reported and constant exchange)
to £524m as we continue to extract value
from the GCAN acquisition, with significant
new business growth within the Large
Commercial & Specialty division,
specifically property, despite continued
soft market conditions.
New business growth in Ontario and
Western regions also added to the year’s
result, as did solid retention across Motor
and our Equipment Breakdown offering.
We continue to see positive results from
our small-business e-trading platform
launched in 2011, with robust new business
growth and significantly improved response
times for our broker partners.
In terms of underwriting result,
Commercial lines delivered another strong
performance with an underwriting profit
of £55m (2011: £42m) and a COR of 88.2%
(2011: 89.8%) driven primarily by Large
Commercial & Specialty.
Personal lines
Net written premiums grew 7% at constant
exchange (8% as reported) to £1,090m
driven by strong growth across both
Johnson and Personal Broker. Personal lines
delivered a COR of 96.1% (2011: 92.3%) and
an underwriting result of £43m (2011: £74m),
including the identification and resolution of
adverse development in bodily injury and
accident benefits reserves in the pre-reform
Johnson Ontario motor book.
Personal Broker
Premiums grew by 9% at constant exchange
(10% as reported), largely driven by our
expansion into Quebec and growth in the
Ontario and Western regions of our
property portfolio.
In June we announced the acquisition
of L’Union Canadienne, a Quebec-based
intermediated insurer mainly focused on
Personal lines. This moved us from the
eleventh to the fifth largest insurer in that
province. Quebec is the second largest
private insurance market in Canada, and
the most profitable, with a stable regulatory
environment and opportunities for future
growth. The acquisition closed on 1 October,
and integration is progressing according
to plan.
Our Personal Specialty Insurance (PSI)
offering had strong contributions from each
of its Auto, Travel and Credit Card portfolios.
We expect to launch a Pet offering to the
Canadian marketplace in 2013, which
positions us well for future growth.
Johnson
Growth of 5% at constant exchange
(6% as reported) to £587m, was due largely
to strong performances in the Atlantic and
Western regions, the completion of two
acquisitions, and the addition of 23 new
affinity partners during the year.
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| RSA | Annual Report and Accounts 2012