Intact and RSA announce exit from UK personal lines motor market
Intact Financial Corporation and its subsidiary RSA announced initiatives aimed at improving the strength and sustainability of the UK & International business.
According to the company, the personal lines motor market in the UK remains extremely competitive and requires significant scale to drive meaningful outperformance, and after a thorough review, RSA is exiting the UK personal lines motor market, representing approximately £120 million of annual premium for the company. The exit includes an agreement to introduce MORE THAN direct motor customers to Swinton Insurance, a brand of Atlanta Insurance Intermediaries Limited and part of Ardonagh Retail, upon renewal.
RSA is recognized as a leading provider of personal lines Home and Pet insurance and holds strong positions in these markets. It will continue to optimize its position in home and pet by improving segmentation, focusing on growth in the direct business and managing partnerships for value. The company also intends to drive cost improvements by leveraging ongoing investments in technology and through further simplification of the business. With these actions, as well as the exit from the UK personal lines motor market, RSA expects muted top-line growth as it accelerates its path to deliver a low 90s combined ratio for the UK&I.
“When we completed the acquisition of RSA, we were clear that we would take necessary actions to drive sustainable outperformance in UK&I. Today’s announcement represents a further step in delivering against our strategic roadmap to optimize our footprint around personal lines Home and Pet, and our Commercial and Speciality lines businesses.” – Charles Brindamour, CEO, Intact Financial Corporation.
“Our primary focus now is on delivering an orderly transition that supports our colleagues and customers. We have incredibly talented people working in this business, and we’re committed to treating them with fairness and respect.” – Ken Norgrove, CEO, RSA UK & International.
- The results of the UK Personal Lines motor portfolio will be reported in Exited lines from Q1 2023 onwards.
- In 2023, RSA expects the combined ratio of the continuing UK&I business to be in the mid-90s.
- Restructuring costs of approximately £35 million are expected in Q1 2023, mostly related to a one-time write-off of intangibles.
- Proceeds from the agreement with Swinton will be received as policies are renewed and are not expected to be material.
- RSA expects to release approximately £60 million of capital held against motor-related insurance risk over time as the portfolio runs off.
- All key metrics related to the RSA acquisition remain largely unchanged, including internal rate of return (IRR) above 20% and NOIPS1 accretion of approximately 20%.