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RSA Insurance saw its profit contract in its final full year before the UK giant is split up by its new owners.
The business said that pre-tax profit had dropped by 2% to £483 million, due to costs associated with Covid – restructuring among other things.
In what is likely to be its last set of full year results, RSA recorded a 3% fall to £6.2 billion in net written premiums – the money that the company gets for selling insurance.
Underlying profit before tax rose 15% to £718 million, it added.
Chief executive Stephen Hester said: “We are pleased to report excellent results for RSA in 2020. Underwriting profits are sharply up to new record levels and return on tangible equity has risen above our target range.”
He added: “The Group paid out some £4.6bn in ‘normal’ claims whilst also providing for over £250m in Covid-19-specific claims, together with offering a range of other customer support measures.”
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But shares remained unmoved, with the prospect of an already-approved takeover deal hanging above the company.
Last month investors voted in favour of the £7.2 billion bid from Intact, a Canadian insurance firm, and Denmark’s Tryg.
The two bidders have agreed to split up RSA’s business between them, separating the Scandinavian part of the firm from the UK and Canada wing.
“For some investors RSA’s results are going to feel like a formality. The takeover bid has been approved by shareholders, the board is enthusiastic and the deal looks set to complete soon,” said Hargreaves Lansdown analyst William Ryder.
“However, we’d encourage investors not to count their chickens before they’ve hatched – the deal could still hit a snag and fail to go through. So it’s still important to keep an eye on RSA’s business performance.”
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