Hen a decision was made to close the doors to the ILU building that had housed a host of international underwriters since 1986, many companies were faced with a relocation dilemma.
Royal & SunAlliance's marine division was among these companies. Yet instead of following the majority of its counterparts into the Lloyd's building, it saw the move as a chance to be part of a major international composite.
By moving into the RSA head office in Leadenhall Street, London, RSA was not only able to build its positioning as “one business”, but the marine division could also make use of the company's IT resources and new and larger facilities. More importantly, it would allow them to cross-fertilise information with other RSA practices .
Peter McDermott, manager and marine practice leader, comments: “Although it was a case of having to move, it raised the questions of where to move and what advantages it could have.
“The obvious conclusion was that the best move would be to the Royal & SunAlliance headquarters. It gave us the best of both worlds: being part of the London market, but also being part of RSA Marine with recognisable branded service, facilities and expectations.
“By moving, we are giving our brokers more options – with new products and new ways of doing things. We can also take advantage of brokers already coming to Leadenhall Court to see other divisions of UK Commercial. The initial response has been really good.”
RSA Marine serves four main businesses: shipowners, which is hull, machinery and related insurance; energy, which is off-shore oil and gas energy insurance; trade, which is cargo and related insurance; and transportation, which includes specialist freight liability insurance.
The marine business has existed since 1720 and it is a key strategic asset for RSA. In 1999, the marine businesses produced in excess of $650m (£430m) gross written premiums globally. The group also has the widest spread of capabilities in the world for global programmes, with operations in more than 56 countries and a network of local specialists in 45 countries around the globe.
To keep in touch with its network the group has developed an advanced communication network between every office, which allows sharing market knowledge and improves broker and customer relationships
David Davies, manager and marine underwriter, comments: “The intranet is a great source of information, but it also helps us maintain the same underwriting disciplines across our network.
“This has been part of our huge investment into IT, which will enable us to look at business opportunities and respond accordingly.”
Another opportunity that is being aided by RSA's growing technology resources is in the area of cross-packaging or cross-fertilising, which have become the new catchwords in marine insurance.
RSA intends to take advantage of it to deliver a combination of specialisms and give their customers the choice they demand.
The division has already began to pilot a new “cargo to construction” product, which draws together teams of class specialists in underwriting, claims and risk management to deliver one business solution for major project customers.
McDermott says: “Another development has been on the ecommerce front, as this is changing the way that marine products and services are being distributed, and we want to take an innovative approach to this.”
The company is also making use of the internet, with internet-based sales, delivery and service tools being developed by various group marine offices.
In the UK regions marine writes mostly cargo insurance but the specialisms exist in the London market.
Both McDermott and Davies are cautiously optimistic that rates will firm on hull and energy because of the feeling in those segments that “enough is enough”. On the energy side, increases are coming through in some sections, including off-shore construction and the hull side in total loss rates for certain types of tonnage.
Davies adds: “There is no pressure on us to write for income. The pressure is to deliver a profit. That goes for all segments.”
Despite the move, RSA Marine intends to remain a leading player in its core marine classes of cargo liabilities, hull and energy.
It has recently had two important account wins, which McDermott and Davies feel were gained as a result of its development in worldwide claims settling, risk management and electronic service support.
McDermott adds: “London is still a specialist market for marine and we will want to remain part of the specialism, but we also want to take advantage of all that Royal & SunAlliance Group can offer us so we can continue to make an impact on the marine market.”