May 9, 2019 / 6:29 AM / 4 months ago

UPDATE 2-Milder British, Irish winters help RSA Q1 profit

* Net written premiums up 3 percent to 1.57 bln stg

* Operating profit up on a constant currency basis

* London commercial insurance rates up 4-20 percent

* Shares up 1.4 percent (Adds CEO comment, detail, shares)

By Carolyn Cohn

LONDON, May 9 (Reuters) - Milder weather in Britain and Ireland helped RSA’s operating profit in the first quarter, the insurer said on Thursday, driving its shares higher.

The home, motor and commercial insurer in a trading statement said operating profit rose on a constant currency basis as it had lower weather-related costs, an improvement in expense ratios, and had cut less profitable business in commercial insurance.

“In the UK and Ireland, we had a very benign winter and weather costs were much lower,” Chief Executive Stephen Hester said on a media call but added:

“In Canada, we and the whole industry had a very difficult winter.”

RSA, best known in Britain for its More Than brand, also has major businesses in Canada, Ireland and Scandinavia.

Net written premiums rose 3 percent to 1.57 billion pounds ($2.04 billion) versus a forecast of 1.6 billion pounds by KBW analysts.

RSA warned last year about poor performance in its London-based international commercial insurance business and pulled out of several lines, including international freight and construction.

Premium income fell 5 percent in the UK and Ireland division as a result of the changes, RSA said.

Commercial insurance prices are rising following two years of heavy losses from hurricanes, typhoons and wildfires.

Rates were up between four and 20 percent in commercial business written out of London, Hester said.

Lloyd’s of London insurers Beazley and Hiscox also reported first-quarter rate rises this week.

RSA’s shares were up 1.4 percent to 542 pence at 0824 GMT, making it the second biggest percentage gainer in the FTSE 100 index.

$1 = 0.7681 pounds Reporting by Carolyn Cohn; editing by Simon Jessop and Jason Neely

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