Bridget McIntyre refuses to echo 'macho' calls for review of broker commission levels
Royal & SunAlliance (R&SA) chief executive Bridget McIntyre has refused to be drawn into the debate on the level of broker commission.
Speaking as the insurer unveiled its 2006 results, McIntyre said she did not want to make "headline grabbing macho statements" on whether broker commissions were too high.
Recent weeks have seen senior executives at AXA Insurance and Norwich Union (NU) state that brokers' commission levels are "unsustainable" and may need to be reviewed.
NU General Insurance chief executive Simon Machell, said last week that "corrective action" may need to be taken to address commission levels as the market begins to harden.
This week, McIntyre told Insurance Times that she had "no particular issue" with the commission levels. She would not be drawn on whether commission levels of 40% or 50% were too high.
"It depends on what each broker does in the relationship [with the insurer]. We will continue to have on-going discussions with brokers."
McIntyre also insisted that the insurer would not follow AXA's lead and begin acquiring commercial brokers.
However, she would not rule out further bolt-on acquisitions.
"Buying distribution is not part of our strategy," she said, adding that last year's acquisition of professional indemnity specialist Martello Underwriting was "not a distribution play".
McIntyre said R&SA would continue to develop specialist lines of business in 2007, highlighting the renewable energy sector as a potential area to explore.
Meanwhile, R&SA unveiled UK underwriting profits of £160m for 2006, up 4% on the previous year.
Net written premium fell by less than 1% to £2.6bn, while the combined ratio improved to 92.3% from 93.1%.
Underwriting profits in personal lines soared by 67% to £65m, boosted by a strong performance from the household book. The loss-making private car book saw a slight improvement in the combined ratio, falling to 102.5% from 102.9% in the previous year.
R&SA's UK commercial account was hit by falling profits in its fleet and casualty lines. The casualty book produced a £21m loss, following a £39m increase in asbestos reserves.
The group reported net written premiums up 3% to £5.5bn in 2006. Underwriting profits increased by 18% to £310m.