Royal and SunAlliance (R&SA) is prepared to continue to shed volume in order to pursue profitable growth, following a 5% decline in its commercial lines book.
For the first nine months of 2007 R&SA’s commercial lines net premium fell by £67m to £1,206m, due largely to withdrawal of capacity in its property and fleet books.
UK chief executive Bridget McIntyre said that, despite the market “remaining challenging”, the company would be willing to lose further volume, and urged the market to implement rate changes.
She said: “We are still lonely in our rating action. There is noise from our competitors, but so far I’m not seeing any action I would view as significant.”
Earlier this month other major insurers, including AXA and Norwich Union, put up rates across many lines of commercial and personal lines business, and have outlined plans to continue the trend in 2008.
McIntyre said that the rate increases would help maximise customer retention, adding that the insurer was effectively 10 months ahead of the competition.
She said: “Our advantage versus the market is clear.”
R&SA delivered strongest growth in its specialist lines, including 14% in marine and 4% in Profin, up to £148m and £107m respectively.
R&SA’s fleet book fell by a fifth to £77m following rate increases of 4% in the first six months of the year, and a further hike of 9% in the third quarter.
R&SA’s commercial property rates have remained flat in 2007. McIntyre would not comment on whether increases were planned.
Meanwhile, the insurer delivered 29% growth its personal lines account, driven by its direct arm, More Th>n, which reported new business up by 14%x.
Commenting on the affinity business, which has a growth target of 50% by 2010, she said: “We have huge momentum.”
McIntyre said the insurer was set to reveal three “significant” new affinity deals.
McIntyre added that the full implementation of R&SA’s trading unit strategy would be delivered by the end of the year.
The insurer has increased rates by an average of 5% over the past four years.
The group said that year-on-year, net premium increased 6.7% to £4.4bn.