“Tony and I feel like two hungry mosquitoes in a nudist camp. Juicy targets are everywhere.” So said Warren Buffett of his US motor insurer GEICO, chaired by Tony Nicely, in a letter to shareholders last year
This weekend, one of those juicy targets turned out to be RBSI, home to some of the UK’s most recognisable insurance brands, and the third-biggest insurer in the country.
A quick glance at GEICO shows how much it has in common with RBSI’s biggest brand, Direct Line. It’s the USA’s third-largest direct writer of motor insurance, dealing with customers on the phone and online, and is well known for its catchy ads.
Its record also demonstrates that famous Buffett efficiency. In 2003, GEICO had 299 policies per employee. Today, under Nicely’s leadership, this has soared to 439. Numbers like that might go some way to turning round RBSI’s plummeting profits. If RBS does go for a trade sale, an overseas buyer makes sense. It would sidestep the kinds of competition issues that an established UK insurer would face, and would save time and money on integration.
Reeling from bodily injury claims, weakened by aggregators driving down prices, and with players falling right, left and centre, the UK motor market needs something close to a miracle. Warren Buffett could be just that. IT
ellen.bennett@insurancetimes.co.uk.
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
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