Stephen Hester says since Zurich ended discussions to buy RSA the insurer has not received any other approaches
RSA will focus on its underwriting rather than price increases to improve its results.
During a conference call this morning following the release of the insurer’s results for 2015 group chief executive Stephen Hester said that the insurer would have to progress through “self-help”.
He said: “It will be a combination of many customer initiatives to keep service levels high, underwriting sophistication to improve results without price increases and cost reduction, to bring more of the underwriting to the bottom line.”
“The insurance market remains pretty competitive. Although conditions vary across different business lines, pretty much there are no price increases in excess of claims inflation.”
The insurer also announced today that it is targeting cost savings of more than £350m by 2018.
Some of the cost savings will relate to staff reduction.
RSA has also signed infrastructure deals with Wipro and Accenture aimed at reducing IT costs, upgrading its IT infrastructure and enhancing it product offering.
Hester said that following Zurich’s decision to withdraw its acquisition plans, RSA has had no further approaches.
But Hester is buoyant about RSA’s performance and the insurer’s ability to continue trading in the long term.
RSA’s UK division made an operating profit of £12m in 2015, three times the £4m it made in 2014.
The unit’s combined operating ratio (COR) improved by 0.4 percentage points to 99.5% (2014: 99.9%).
Net written premiums increased by 2% to £2.61bn (2014: £2.5bn).
The improvement came despite a £134m claims bill from December storms Desmond, Eva and Frank. Weather claims added 6.5 points to the COR (2014: 3.8 points).
He said: “We have a bit of a dance with Zurich in the summer and since then their own results have fallen away quite badly. We have had no approaches from anyone since then.
“But more importantly with our results today, you can see that relative to six months ago when we were talking to Zurich this company is stronger and better and inherently more valuable.
“We have conquered some key risks and have advanced in our performance. We are marching forward independently.”