Wet UK weather to cost RSA £50m

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RSA Insurance (Other OTC: RSANF.PK - news) has warned that poor summer weather across the UK has cost it about £50m in claims so far.

The UK suffered the wettest June on record this year, causing widespread flooding, and 20 flood alerts from the Environment Agency remain in place across the country.

RSA , which provides household, car and property insurance, said there have been additional costs this month as the rain continues to fall.

"Following the wettest June on record in the UK, RSA announces that the net loss across the group’s UK Household, Motor and Commercial Property portfolios from last month’s adverse weather is estimated to be around £40m," RSA said in a trading update .

"Current expectations are that the impact of the continued rainfall experienced to date in July will be around £10m.

RSA, which is led by chief executive Simon Lee, also admitted that the double earthquake in Northern Italy in May has hit the company's accounts. The natural disasters, which occurred nine days apart, killed 26 people and caused huge damage.

"The net loss to the group in relation to the two earthquakes in the Emilia-Romagna region of Italy in May is estimated to be around £35m," the company added.

Despite the losses, RSA said it still expected its full-year combined ratio to be "better than 96pc". Combined ratios are a key industry measure of underwriting profitability, with figures below 100pc reflecting a profit.

Barrie Cornes, analyst at Panmure Gordon, said: "The cost is much higher than the £8m-£15m that we had forecast, and this appears to be as a result of losses in commercial insurance as well as motor.”

"Whilst we view this as slightly disappointing these are exceptional weather losses and clearly something over which the management has no control. RSA’s reinsurance programme kicks in at £100m loss but these losses are spread over a long period and wouldn’t be seen as a single event anyway."