Insurer boss reveals cost of Solvency II

Simon Lee RSA

RSA Group chief executive Simon Lee says his company has no interest in making another offer to buy Aviva’s general insurance business.

Lee said the insurer is instead looking to expand overseas and would only consider bolt-on acquisitions.

Lee took over as group boss last year but was part of the management team whose £5bn approach was rejected by Aviva in August 2010.

“The chapter is closed on that. We thought at the time that it was the right thing to do,” Lee said in an interview with the Telegraph.

“It would have been three big in-market consolidations in the UK, Ireland and Canada and we thought we would have been able to drive significant value from that, but Aviva weren’t interested so we decided it wasn’t something that we should pursue.”

Lee is aiming to place 70% of RSA’s business outside of the UK by 2014 (currently 63%), a year ahead of plan.

He refused to speculate that RSA could make another transformational offer. “We’re very much going on the basis that our approach is bolt-on acquisitions.

“We’re looking to expand more overseas and an Aviva acquisition would actually see us double-up in the UK. I’m not sure that’s the right thing to do, given some of the difficulties in the UK market. Back then we were pretty confident we would have been able to do it, but I think the market conditions today are very different.”

Lee also estimated that RSA’s cost for complying with Solvency II, earmarked for January 2014, will exceed £100m.