Move is said to create growth and stop its brands from competing against one another

Royal Bank of Scotland Insurance (RBSI) has launched the second phase of its restructuring plan to create more cohesion between its various, sometimes competing, brands. The move has so far resulted in the loss of two senior managers.

The restructuring was revealed on on Tuesday.

Chief executive Chris Sullivan has been quite candid about the need for RBSI to put a stop to the competitiveness between its brands including Direct Line, NIG and Churchill and start acting more as a single company.

Last week, in a memo to senior managers, Sullivan announced that both Chris Moat, managing director of RBSI motor and chief risk officer Robin Webster, would be leaving the company.

Staff were also informed that commercial and brokers will now fall under one managing director – Andy Cornish – in order to place all commercial expertise in one area, regardless of distribution channels.

The restructuring saw a further shifting of existing managers into different departments.

An RBSI spokesperson said: “Our focus over the next 12 months is on delivering strong income and profit growth and the moves announced last week will allow us to do that.”

When Sullivan took over as chief executive in January from Annette Court, one of his first moves was to strip the various brands of their aligned bosses, opting instead for product line and distribution managers.

At the time, management was split into four distribution groups: motor, household, life/international and broker partnerships.

Moat, who was managing director of Direct Line, became managing director of motor for RBSI.

The latest changes however, see broker and commercial, partnerships and international and household and life, paired together.

For one industry analyst very familiar with RBS, the move makes perfect business sense.

The source said: “There are huge cost pressures for the whole industry at the moment and many organisations are looking at how to improve the overall efficiency of the business model. This is a perfectly sensible set of responses.”

The analyst said the restructuring was likely to be an attempt to break down the silos behind the brands rather than the rationalising of the RBSI brands.

He said that the greater cohesion would create cost savings in terms of infrastructure and call centres.

Changes could also provide more opportunities for selling products to banking customers through RBS’s UK branch network.

Another source however, with ties to RBSI, was more suspicious of Sullivan’s motives and believes the changes go beyond just cost savings and efficiency.

Following ongoing industry rumours suggesting the interest of some major insurers in purchasing NIG, the source questioned whether placing all of the brand’s commercial products in one place may make it easier for RBS to sell.

He said: “This would be a move for RBS to go direct and cut out all the intermediaries and brokers. They are launching Direct Line into commercial anyway.”

Regardless, analysts agree managing directors may have a big job in getting the brands, have at times undercut one another, to work together, particularly as one industry source suggests, the new roles don’t seem as clear cut as they were in the past.

He said: “From an outside perspective, it looks like a matrix of things. Who is responsible for what? If something falls through the cracks, who takes the rap? It will become more informative once they fill the vacant positions.”

News of the changes, particularly the loss of Moat, surprised some industry sources.

Charles Earle, Arista Insurance chief executive and former RBS employee, said: “I’m surprised to see a senior MD like Chris Moat leave the company and take all that experience with him, but no doubt he and the organisation have their reasons for that decision.”