Insurer RSA has agreed a £7.2bn takeover by a consortium of buyers (Getty Images)
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Insurer RSA posts profit growth ahead of £7.2bn takeover deal

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Insurance group RSA posted a double-digit rise in profit for 2020 ahead of its £7.2bn takeover by a consortium of Canadian and Danish buyers.

RSA, which owns brands including More Than, reported operating profit of £751m, up 15 per cent year on year.

Group underwriting profit also jumped 36 per cent to a record high of £550m.

The company, which specialises in home, motor and commercial insurance, said the positive trading was a result of improved underwriting disciplines and cost efficiency.

RSA said it paid out roughly £4.6bn in regular claims, while Covid-related claims totalled more than £250m.

Overall, it estimated a £42m hit to profit as a result of Covid from premiums, claims and investment income effects.

It comes ahead of RSA’s takeover by Canada’s Intact Financial and Denmark’s Tryg, which is due to complete in the coming months.

Under the details of the all-money bargain, Tryg will assume control over the Swedish and Norwegian arms of RSA while Intact will have the Canadian, British and global organizations.

Chief executive Stephen Hester hailed “excellent results” for the year despite the impact of the pandemic.

“We have built a high performing company and 2020’s results showcase the value creation thereby achieved. This in turn drove the 52 per cent premium we were able to negotiate in the four quarter through an all-cash bid from Intact and Tryg.”

Hester is set to step down as boss once the takeover deal has completed.

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