RSA Group is to restructure its specialty and wholesale business by exiting three classes of business and reducing exposures in others.
The move is part of an ongoing review to streamline the group’s international exposure whilst improving underwriting, pricing accuracy and risk management.
RSA has concluded that its international construction, international freight and fixed price marine protection and indemnity insurance business lines are unlikely to meet he group’s profitability requirements in the foreseeable future.
As a result, RSA is exiting these lines of business with immediate effect or at contract expiry.
The combined impact of this is expected to result in a one third reduction in RSA’s London Market premium, which J.P. Morgan estimates is equivalent to around £100 million, or less than 2% of group premium.
J.P. Morgan notes the impact on profit is likely to be far lower and may even be a positive, as in recent years it is believed this business will have been contributing combined ratios north of 100%.
“RSA has historically served the London International Specialty and Wholesale market across a broad range of products and exposures,” said Steve Lewis, Chief Executive Officer of RSA UK & International.
“The changes we are making to our portfolio will enable us to take a much more targeted approach, focusing our efforts on specialist areas where we have market leading expertise and capacity. We will continue to evolve and build on this strategy over time in order to deliver sustained value for our customers and shareholders alike.”
Tony Buckle, Managing Director of RSA global risk solutions, added, “As a specialist insurer to the London Market, RSA will offer distinctive, best-in-class propositions to our customers in the segments on which we are focused.”
“This will enable us to develop and sharpen our expertise, and manage our exposures and volatility more effectively. We will be working closely with our customers and their brokers to assist them in a smooth transition.”
RSA’s London Market business, reported as part of RSA’s UK and International region, will now focus on four key specialisms, namely International hull; international cargo and transportation;
international property; and international engineering and renewable energy risks.
