RSA’s UK&I business ‘is absolutely on track’ despite being ‘heavily impacted by Covid’

Following the publication of RSA Group’s 2020 full year results, chief executive of the UK and International business Scott Egan said the portfolio is “strategically absolutely on track”, despite being “heavily impacted by Covid”.

Speaking to trade journalists after releasing the group’s 2020 financial results, Egan explained that from “a group perspective, an excellent set of numbers for the year in what might be our last set of disclosures – a record underwriting result and a record combined ratio, I think gives us a lot to be really proud about and really points to a huge amount of work over a number of years by everyone at RSA”.

This includes a 36% improvement in RSA’s group underwriting profit, from £346m in 2019 to £502m last year.

Despite this success however, Egan admitted that the insurer’s UK and international business had been “heavily impacted by Covid” in 2020. For example, “the headline combined ratio for UK&I was 96.7%”, Egan continued. But, excluding the impact of the pandemic and “putting the pluses and minuses of Covid to one side, the combined ratio for the region was 94%”.

Looking at the financial figures excluding the effects of Covid-19, Egan said RSA UK and International was “strategically is absolutely on track”.

He explained: “If I look right across the business, I think we’ve really shown great momentum from 2019 into 2020 and my challenge for the business was always to keep building on our building blocks of 2019, so I’m really proud of the achievements of the year and therefore my message would be that RSA UK&I strategically is absolutely on track.

“We set out two years ago to restore our credibility and I said that very openly, publicly and internally. I think with these sets of results, we can look forward to the future with confidence and ambition.”

Broker partnerships are key

Egan was keen to emphasise the role brokers have played over the past year in contributing to RSA’s positive figures, particularly in commercial lines.

“I’d like to say a massive thank you to our partners and to our brokers who we’ve worked incredibly closely with during the year and who’s support we never take for granted,” he said.

“We can always do better and our ambition is to do that, but I want to publicly thank them for everything they’ve done in support of RSA in 2020.

“Strategically, our broker partnerships are key to RSA, they’re key to our success and therefore that’s one of the reasons why I was very open in our need to step up and do better and I think over the last 24 months, we’ve tried to do that across different aspects of the relationship.

“I think our brokers have started to see a difference, they’re starting to see a difference in our trading mentality and our engagement with them. My message is always the same one – a massive thank you for their support for RSA, thank you for 2020 and I look forward to continuing those relationships in 2021 and beyond.”

Communications with brokers varied in 2020 however, due to the social distancing guidelines implemented by the government. Egan said this was not a deterrent to regular communications, however.

He noted: “Obviously 2020 has proved a bit more challenging to be out there putting shoe leather on the pavement and meeting our brokers. But what’s been great is the team have pivoted to embrace the new technology that we’re all having to get used to. Our broker relationships have really stepped on again in 2020.

“For our commercial lines business, you should see that as a broker-led business.”.

However, in Insurance Times’s recently published Five Star Rating Report: Personal Lines 2020/2021, RSA was awarded a two star result yet again by brokers.

Although its policy documentation received three stars from brokers dealing in personal lines, the insurer was only awarded two stars for its quality of cover, relationship management and underwriting. Brokers gave RSA just one star for its claims experience.

2021 and beyond

Speaking more on personal lines, Egan confessed that RSA’s personal motor line had declined between 2019 and 2020, however “the core reason for it is linked to a telematics product, which is a young driver box product”.

He continued: “During 2020, I’m afraid there hasn’t really been that many driving tests and normally that is a large chunk of our new business and so from my perspective, it really is a one-year effect and fingers crossed as and when we can return to some degree of normality post-Covid, we would expect to see our offering continue to be bought and land well in the marketplace. We expect a recovery in our telematics product and proposition.”

Despite this dip, Egan added that RSA UK&I is looking to grow in this line of business.

“Strategically, we have an ambition to grow what I call our core motor product and for the last few years, we’ve been quietly behind the scenes improving our capability right across our value chain,” he said.

“In 2021, we’re going to take some careful steps, but I think it’s absolutely right that we should seek to have ambition to have motor sit alongside our growing direct home book and our growing direct pet book. I think our customers would expect that from us as they come in to buy.”

Continuing to look ahead to 2021, Egan believes this is “going to be another important year for the group”, especially with a “change of ownership on the horizon”.

In particular, there are three key areas RSA plans to concentrate on this year:

• Grow the business “in areas where we feel confident”.
• Continue to simplify the business for employees and customers.
• Build a sustainable business.

“Every decision that we take, is about building this business to be great today, great tomorrow and great the day after,” Egan added.

Speaking on RSA’s acquisition by Intact in consortium with Tryg, Egan said: “If I look ahead to the change in ownership, I’m really excited by it.

“There’s a lot that Intact can bring to the table that can help us strategically and in some cases, even help us accelerate that.”