The insurer’s chief executive for UK and international business admitted that ‘there’s work to be done in 2021’ around business interruption coverage and reputational repair

The FCA’s test case on the interpretation of business interruption (BI) policy wordings when applied to Covid-19-related claims proved to be “a difficult moment during the year for RSA”, with the insurer now having “work to do to rebuild our reputation with our customers”, said Scott Egan, chief executive of UK and International at RSA.

Speaking to trade journalists following the publication of RSA’s 2020 full year results on 26 February, Egan said that the test case action, which progressed through both the High Court and Supreme Court, set “important new precedence” for the marketplace.

He explained: “The BI test case was a difficult moment during the year for RSA, but it was also a difficult moment for every insurer right across the marketplace and obviously I was heavily involved personally on behalf of the company.

“The test case was intended to provide clarity on policy wordings and RSA was happy to volunteer to be part of that. The reason we wanted to do that was to make sure we could expedite legal process working with a regulator to make that happen on the basis that we could get clarity and certainty for customers. Obviously, we’ve now reached that through the Supreme Court – within that, important new precedence was set.

“Our focus as an organisation now is to make sure that we now act on those legal judgments and operationally, we’re doing everything that we can every day to pay the claims for our customers, who we absolutely understand, this is a critical and difficult period for them.”

Holding the mirror up

RSA was one of the eight insurers involved in the initial High Court proceedings; it also participated in the appeals hearing at the Supreme Court.

As a result, Egan said: “We have to be honest with ourselves and say reputationally, the industry has taken a hit during 2020.”

He continued: “The whole premise of the process that we went through was one to bring legal clarity and certainty as quickly as we possibly could, but I’m absolutely aware that as an industry and for RSA specifically, we have work to do to rebuild our reputation with our customers so they absolutely understand the policies that they’re buying from us, they absolutely understand what’s covered and what’s not and that we are there for them when they need us most.

“In BI in particular, I think there’s work to be done in 2021.”

According to Egan, this work will include revisiting policy wordings, as well as ensuring that valid claims are paid.

“What we need to really make sure is that in our policy wordings we are very clear what risks are covered and more importantly our customers absolutely understand what’s covered and what’s not and so effectively, that’s what we’re looking to improve,” he added.

“I think it’s absolutely right that we should hold a mirror up and say are there areas where that can be improved and where we can be clearer for customers.

“I think that is true right across the industry and I think it’s true in particular wordings for RSA and so that’s what we aim to do during 2021.”

Despite RSA’s acknowledged reputational hit, Egan said that business is still performing its role as an insurer and has been paying out claims, even if customers think differently.

“As an organisation over 2020, we paid out over £2bn in claims and we paid effectively 760,000 claims,” he said.

“We’re very clear on our role in the claims environment. We are there for our customers when they need us most and we are there when something goes wrong.

“It’s really important that we keep bringing ourselves back to that message. That’s exactly, in effect, what we are here for.”

Steely determination

Within UK and international business, Egan admitted that RSA’s financial results were “heavily impacted by Covid” in 2020.

Despite this, “from the leadership team’s perspective, we’re really pleased with the underlying performance of the business”, Egan said, as “we’re showing we’ve got really good momentum within the company”.

He added: “The key performance indicators are moving in the right direction, but we will never be complacent and there’s a real steely determination within the organisation to keep that momentum going and a real sense of pride of what we’ve achieved so far.”