Intact Financial Corporation and its subsidiary RSA have announced the company’s exit from the UK Personal Lines motor market, an initiative that, according to the company, is aimed at improving the strength and sustainability of the UK & International business.
RSA’s UK Personal Lines motor represents 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 (Swinton) and part of Ardonagh Retail, upon renewal.
Charles Brindamour, Chief Executive Officer, Intact Financial Corporation, commented: “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 optimise our footprint around personal lines Home and Pet, and our Commercial and Speciality lines businesses.”
As a leading provider of personal lines Home and Pet insurance, RSA claims it will continue to optimise its position in this market by improving segmentation, focusing on growth in the direct business and managing partnerships for value.
It also said it 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, the company expects muted top-line growth as we accelerate our path to deliver a low 90s combined ratio for the UK&I.
“Our primary focus now is on delivering an orderly transition that supports our colleagues and customers,” said Ken Norgrove, Chief Executive Officer, RSA UK & International. “We have incredibly talented people working in this business, and we’re committed to treating them with fairness and respect.”
The results of the UK Personal Lines motor portfolio will be reported in Exited lines from Q1 2023 onwards.
This year the company anticipates the combined ratio of the continuing UK&I business to be in the mid-90s. In Q1 2022, restructuring costs of approximately £35 million are expected, mostly related to a one-time write-off of intangibles.
Additionally, RSA also 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, according to the company, these include internal rate of return (IRR) above 20% and NOIPS1 accretion of approximately 20%.
