But RSA finance chief expects further changes and job cuts
The big changes to RSA’s book of business are complete, according to group chief financial officer Scott Egan.
But he expects further tweaks as the company progresses towards its goal of being “best in class”.
The company is also likely to make further job cuts as it continues to pursue £350m of annual cost savings by the end of 2018.
Speaking to Insurance Times following the release of RSA’s nine-month 2016 results yesterday, Egan said: “We have performed what I would term the major surgery to our portfolio, but across the world, but that doesn’t mean to say we won’t make decisions as we go along based on the criteria of service delivery, and profitability. You will always see small moves.”
An example of the big changes that RSA has made is exiting brokered personal motor in the UK. On the smaller side, RSA announced in its results that it had exited some unprofitable household schemes in the UK, which were the main reason for a small drop in UK personal lines net written premium.
RSA is working to improve three main areas: the customer journey, underwriting performance and costs.
On the cost side, Egan said that RSA will have achieved £250m of the targeted £350m cost savings by the end of 2016, essentially leaving it two years to achieve the remaining £100m of savings.
Egan said that the bulk of the savings would come from technology performing the more menial tasks currently performed by people, which will lead to further job cuts.
He said: “It is sensible to do that and what we are left with is higher quality, higher capability people interacting with our customers.”
He added: “Ultimately, given that 70% of our costs are full-time employee costs, we would expect that to reduce. That said, we are not a massive employer – we have got 14,000 people within the company.”
He also noted that RSA was hiring in certain areas, such as Peterborough.
He said: ”There are pockets where we are increasing headcount but it will be on a business needs basis.”
Middle to top
Egan said that the third quarter results showed that RSA is making progress to being “best in class”. He said: “If you go back 24-36 months, this company was a lower-quartile performer. We have taken it to middle of the pack.
“What these results and the momentum we have in the company demonstrate is that we are making good steps towards our ambition to be best in class in each our markets.”