Focus on home and pet after motor brokers axed
RSA has vowed to invest in better pricing, underwriting, claims experience and customer journey for the personal lines customers that remain in its brokered business.
RSA announced in May that it would to cut ties with 800 motor-only brokers by the end of the year after concluding that its 111.7% combined operating ratio could not be turned into a sustainable profit.
After the withdrawals have been completed, RSA will trade with 1,100 personal lines brokers in either purely home products or a portfolio that includes motor.
Mark Allan, managing director of personal lines intermediated, said that RSA’s focus on home and pet insurance, with a smaller motor business, would let the business better channel planned investment.
“Stephen Hester talks about being really good in the areas that we focus on,” he told Insurance Times.
“By removing things that just don’t make sense for us, or cause us to be distracted, we can channel all our efforts and investment there. And that makes us much more likely to be successful going forward and much more likely to do a great job for our partners and brokers.”
Allan said some of the capital raised by Hester for investment would be used for some personal lines broker products.
“We’re working through at the moment what that ultimately looks like but it will include better pricing, better underwriting, improving our claims capability, end-to-end customer journeys and also importantly investing in our people,” he said.
Allan said RSA’s planned remaining presence in motor was sustainable because it centred on affinity arrangements with better profitability or a balanced book.
“The motor relationships we’ve got make sense – if you remove motor it puts the home at risk, so we look at that as a portfolio.”
RSA has tracked the sentiment of the 800 brokers it is terminating its trading relationship with and that 90% had either supported and understood its move, or welcomed the clarity. Some 7% said they were concerned and 3% had company-specific issues.
“It matters that people respect the way we’ve handled it,” Allan added.