Royal & SunAlliance Canadian results improving

With the release of U.K.-based Royal & SunAlliance’s first quarter 2004 results, the company is reporting improvement in its Canadian operations.Remedial action at the Canadian operation has led to a seven-point improvement in the combined ratio since first quarter 2003, dropping down to 101.7% for the most recent quarter.”Both household and property accounts have benefited from improved claims frequency and an absence of large losses,” notes the company’s statement. “Johnson [RSA Canada’s group benefits and insurance operation] continues to achieve strong premium growth while achieving a better than expected loss ratio.”Unfortunately, Canada still represents the only international operation to post a combined ratio over 100%. The U.S., for example, posted a 90.9% ratio for first quarter 2004.The company is enjoying strong rate increases across lines in Canada, with personal lines rates up an average 13% since first quarter 2003. Over the same period, commercial liability has risen 15%, with commercial property up 9%. But overall premiums are down slightly. Personal lines net premiums written were down to $172 million for first quarter 2004, versus $181 million a year ago. Commercial premiums held steady at $99 million, versus $103 million a year ago. Much of this is due to restructuring of the company’s book of business since early 2003.The company’s underwriting result improved over the same comparative period, with personal lines posting just a $4 million underwriting loss (combined ratio: 103.7%) in first quarter 2004, versus an underwriting loss of $12 million (combined ratio: 106.1%) a year ago. Commercial lines turned a $7 million underwriting loss (combined ratio: 116.7%) in first quarter 2003 into an underwriting profit of $5 million (combined ratio: 93.5%) this year. Specifically, the commercial property line excelled, producing a combined ratio of 68.4% in the first quarter of this year.The loss ratio on personal lines dropped to 77.7% from 80.0% a year ago, while the commercial lines ratio plummeted to 51.3% from 72.0% over the same period. Overall, the Canadian operations posted a loss ratio of 71.0% for the first quarter of this year, compared to 77.6% a year ago.