Monday: Leaving Europe behind

Is Europe a busted flush? RSA’s new group chief executive, Simon Lee, has taken the bold step of publicly ruling out another bid for Aviva.

Lee, formerly the boss of RSA’s overseas business, believes that global expansion is the way forward. He aims to place 70% of RSA’s business outside the UK by 2014. This reflects a wider shift among the major UK and European insurers, who are increasingly seeing non-European markets as the key to growth.

This reflects not only the nail biting uncertainty about the stability of the euro and the paltry prospects for economic growth within the EU in the short term, but also the potential for insurance growth within these new and emerging markets.

As per capita income increases, so does insurance penetration, and established global players are in a strong position to leverage their scale and expertise in quickly overtaking domestic players.

Meanwhile, growth in domestic markets is stagnant, competition is cut-throat and even the fittest players are struggling to write for profit in commercial lines.

This goes some way to explaining the stalled sale process around Brit – UK assets are just not looking that attractive right now, particularly for insurers who believe they can win the accounts without needing to buy the business. When it comes to M&A this year and next, Lee is far from the only group chief executive set on going global.

Back in the UK

It’s full speed ahead for Aon’s move to London, with a series of agreements around directors’ compensation for upping sticks from Chicago. This will be crucial for those individuals with sizeable US stock holdings that will have to take a tax hit when selling their US stocks and buying shares in the newly incorporated UK entity.

Meanwhile the reinsurance business Aon Benfield bids a fond farewell to Chily, one-time Benfield chief exec Grahame Chilton. His new non-exec role at the UK holding company is likely to see him take a behind-the-scenes role, with little public or client profile.