R&SA global goal failed

Royal & SunAlliance (R&SA) UK chief executive Duncan Boyle admitted this week that the insurer had conceded defeat in its attempt to establish itself as a major global player.

"This clearly signifies that our aspirations to have a global business are no longer feasible," Boyle said.

Boyle was speaking after the insurer's announced a £960m rights issue and 1,000 job cuts. R&SA also confirmed finance chief Julian Hance's imminent departure.

Boyle said the insurer would commit around £500m from the rights issue to covering US losses.

"It will enable us to deal with our US company issues after our efforts to expand in the US failed," he said.

But Boyle said R&SA would now focus on Canada where it had a better chance of securing significant market share. "In Canada, we have the scale to be a top player," he said.

Boyle confirmed the rights issue would also reduce the insurer's dependence on its Munich Re quota share arrangement. Munich Re this week announced an after-tax loss of £417m for the first half of 2003.

In the week that the insurer announced 1,000 job cuts, Boyle said all the jobs affected would be "outsourced to a third party". He also confirmed that R&SA is piloting an offshore service centre housing around 100 employees, but declined to reveal the location.

Meanwhile, Boyle sought to reaffirm R&SA's commitment to its UK brokers. "There will be no further review of our business in the UK. We have selected our partners and we will continue to work with them," he said.

An R&SA spokeswoman said that 80 jobs were available at the Halifax office and the insurer hopes "Leeds staff will take up the opportunity to relocate or commute".

This streamlining operation reduces the number of UK personal intermediated lines service centres to three main sites - Bristol, Halifax and Oldham. The transfer will be completed by 31 March 2004.

R&SA will continue to employ around 350 people in its commercial and UK claims operations in Leeds.