RSA to extend the cost-cutting program in the UK 

RSA chief executive Stephen Hester today said more costs need to be taken out of the UK.

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UK and international chief Scott Egan, a former Towergate finance boss, is over-seeing improved results in the UK business 

Hester told analysts during the second quarter results briefing that the cost-reduction program, launched last year, would be extended.

”We do need to take out more cost, and we will be expanding and extending the program in the second half, although, we’re not able today, to give you metrics about that since, obviously, we talk to our people first,” he said.

Hester wants to target an expense ratio - the ratio of costs set against premium - better than 20%.

Despite the extra work needed on costs, Hester said he was pleased with the UK business.

”Our domestic U.K. business also is getting better. It’s slightly masked at headline level by much worse weather in the first half this year than the second half. If you equalize the weather, we have something like a 40% improvement year-on-year in profitability.

”And obviously, we’re pleased with that. Attritionals are improving, including an excluding COVID, large losses seem to be in a sensible place.”

Hester was speaking after the firm posted record underwriting results.