{"id":244,"date":"2013-09-02T07:47:23","date_gmt":"2013-09-02T07:47:23","guid":{"rendered":"http:\/\/www.asadkarim.co.uk\/?p=244"},"modified":"2013-09-02T07:47:23","modified_gmt":"2013-09-02T07:47:23","slug":"rsa-insurance-low-interest-rates","status":"publish","type":"post","link":"https:\/\/www.asadkarim.co.uk\/?p=244","title":{"rendered":"RSA Insurance &#038; Low Interest Rates"},"content":{"rendered":"<p><strong>RSA<\/strong> Insurance provides risk cover against its high quality assets.<\/p>\n<p>Formerly known as <strong>Royal &amp; Sun Alliance<\/strong>, a FTSE-100 member, is a major global insurance business. Its business is relatively straight forward, it takes in insurance premiums, and pay-outs if disaster hits. It does this, by simply taking on risk from the premium payer (insurance holder) and accepts that risk against the assets the RSA holds.<\/p>\n<p>A simple way to understand the insurance business is to know the &#8220;operating ratio.&#8221; That is the insurance pay-out (losses it has to pay to holders) against the income it receives.<br \/>\nFor RSA that number is 95%<\/p>\n<p>Thus makes a profit, (takes in \u00a3100 in premium income, and pays out \u00a395)<\/p>\n<p>The 2012 premiums income was \u00a38,353 Million (\u00a38.352 Billion). The assets that RSA holds to secure itself against losses have to high quality and liquid assets to meet any claim.<\/p>\n<p>RSA holds a <strong>\u00a314.3bn asset portfolio<\/strong> (<strong>\u00a314,300,000,000<\/strong>) that is made up of government bonds, high quality corporate bonds, cash, equities and property.<\/p>\n<p>Bonds\u00a0\u00a0 = <strong>82%<\/strong><br \/>\nCash\u00a0\u00a0\u00a0\u00a0\u00a0 = <strong>9%<\/strong><br \/>\nShares\u00a0 = <strong>4%<\/strong><br \/>\nProperty= <strong>2%<\/strong><br \/>\nOthers\u00a0 = <strong>3%<\/strong><\/p>\n<p><strong>Total = 100%\u00a0\u00a0\u00a0\u00a0\u00a0<\/strong>\u00a0<br \/>\nA very salient facts from the annual report [http:\/\/www.rsagroup.com\/rsagroup\/en\/investor-relations\/investor-kit].<\/p>\n<p>Page 3: Due to low interest rates, it only managed to have investment income of \u00a3515m impacted by the continued low yield environment. (An effect of low interest rates).<\/p>\n<p>A very sobering fact, with \u00a314.3bn of investment assets it is only making a return of \u00a3515m. (<strong>3.5% return<\/strong>) This shows that insurance companies are struggling to make money in this climate, which in the UK will last at least for 3 years according to the Bank of England.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>RSA Insurance provides risk cover against its high quality assets. Formerly known as Royal &amp; Sun Alliance, a FTSE-100 member, is a major global insurance business. Its business is relatively straight forward, it takes in insurance premiums, and pay-outs if disaster hits. It does this, by simply taking on risk from the premium payer (insurance [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-244","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=244"}],"version-history":[{"count":1,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/244\/revisions"}],"predecessor-version":[{"id":245,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/244\/revisions\/245"}],"wp:attachment":[{"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=244"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.asadkarim.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}