’We were clear that we would take necessary actions to drive sustainable outperformance in UK and Ireland,’ says chief executive

RSA Insurance will exit the UK personal lines motor market as the business looks strengthen its combined operating ratio (COR).

The Intact Financial Corporation-owned insurer said in a statement today (28 March 2023) that it had decided to make the move after conducting a “thorough review” of its business.

RSA said the motor market in the UK remained competitive and “requires significant scale to drive meaningful outperformance”.

The business believes leaving the motor market will represent the loss of around £120m of annual premium for the firm.

However, Insurance Times understands that the RSA’s personal lines motor segment was operating at a COR significantly above 100%, meaning the lost premium does not represent an operating loss to the business.

RSA added that it expected around £35m of restructuring costs in Q1 2023, mostly related to one-time writeoff intangibles. 

The insurer will now focus on optimising its position in home and pet lines by improving segmentation and focusing on growth in the direct business and managing partnerships.

”We also intend to drive cost improvements by leveraging ongoing investments in technology and through further simplification of the business,” a statement said.

“With these actions, as well as the exit from the UK personal lines motor market, we expect muted top line growth as we accelerate our path to deliver a low 90s combined ratio for the UK and Ireland.”

Intact chief executive Charles Brindamour added that RSA leaving the motor market was a “further step in delivering against our strategic roadmap”.

“When we completed the acquisition of RSA, we were clear that we would take necessary actions to drive sustainable outperformance in UK and Ireland,” he added.

“Today’s announcement represents a further step in delivering against our strategic roadmap to optimise our footprint around personal lines home and pet and our commercial and speciality lines businesses.”

‘Orderly transition’

RSA’s exit from the motor market included an agreement to introduce More Than direct motor customers to Swinton Insurance.

Swinton is a brand of Atlanta Insurance Intermediaries Limited and part of Ardonagh Retail, upon renewal.

Ardonagh Retail chief executive Ian Donaldson said: “We are proud to confirm that Atlanta has been selected to transfer the renewal rights of RSA’s direct motor line of business for customers that RSA introduce to Swinton Insurance.

“We have worked in close partnership with RSA for a number of years – including the previous successful transfer of the renewal rights of their direct van line of business – and believe Atlanta and Swinton Insurance is the perfect home for motor.

“We look forward to working with RSA over the coming months on a smooth transition and to welcoming their 170,000 customers to our ever expanding group.”

Ken Norgrove, chief executive of RSA UK and international, said its primary focus was now on delivering an “orderly transition” that supports colleagues and customers.

“We have incredibly talented people working in this business and we’re committed to treating them with fairness and respect,” he added.