Insurer planning to reduce UK expenses by between 18% and 19%
More UK job cuts will follow the 100 RSA made in the first half of the year, group chief executive Stephen Hester has warned.
Globally, RSA plans to cut its expenses by 10% (£180m ) in addition to the savings it will make from disposals. But in the UK it wants to reduce underlying costs by between 18% and 19% over three years.
“It’s a sad inevitability that jobs will be part of that,” Hester said this morning.
“There won’t be big job announcements but a series of small ones as there have been in recent years.
“Of the markets we operate in, the UK is the least profitable and the most competitive, not just for us but for everyone.”
Cost cutting is not the only measure RSA is taking to improve profitability – in the UK premiums were down 18% as it pulled back from unprofitable business.
It has cut motor-only broker relationships, restructured its Motability contract and pulled back from other problem areas such as professional indemnity.
“We’ve given up more premium in the UK than elsewhere in exchange for better underwriting,” Hester told Insurance Times.
“I’m very pleased that despite these changes our retention rates are holding solid. Our customers like and want to do business with us. We’re not chasing new business in the wrong areas as much as we did before.
“Although there was some uncertainly in the last year we can say clearly to our brokers and partners that we know what our appetite is in the UK. There are no more shoes to drop.
New UK head
Asked why he chose Steve Lewis as RSA’s next UK and Western Europe chief executive, Hester said: “It was really straightforward – he was the best candidate I interviewed.”
Hester said he had interviewed six, seven or eight people from a list of 20.