It feels like such a short time ago since RSA broadcast its takeover by Canadian insurer Intact Financial Corp. and Danish insurer Tryg A/S, a deal that topped the M&A charts as the biggest acquisition of a UK-listed company in 2020. But, though it might not feel like it, it’s over half a year since that announcement and the transaction has now been completed.
It has been a busy time for the business, noted Scott Egan (pictured), who remains RSA’s UK & international (UK&I) CEO post-takeover, but this recent milestone marks an exciting next step in the ongoing journey of RSA. When he first joined the business, he said, he was open about the challenges facing the UK&I business and the credibility it needed to restore. Now, despite the tumultuous external environment, the business is running ahead of expectations and its strategic priorities for the future are clear - growth, simplicity and sustainability.
“As I sit here today, I’m never complacent because I never would be,” he said, “but I would say we are ahead of plan in our recovery. For me, the turnaround phase is now over and we have set our sights on a more ambitious target, which is outperformance. And in the first five months of this year, we’ve got off to a good start in that regard, and so that journey towards outperformance has started. It won’t, of course, be done in five minutes. Saying outperformance is one thing but achieving it, as we all know, is something quite different.”
This goal is being evaluated through three key lenses. Firstly, Egan said, customer metrics, which are improving year on year and, though they could be better, the business’s NPS scores, retention levels and new business levels are all up, where the team wants them to be. Secondly, the business’s staff and culture survey has shown a lot of improvement in the last few years, revealing an engaged team eager to achieve this outperformance. And finally, touching on financial performance, Egan highlighted that, looking through COVID, the underlying performance of the UK&I business is strong.
During a recent media briefing, Egan touched on several pressing topics concerning the Intact takeover, and clarified the standing of the RSA identity. The RSA brand is a strong brand, he said, and it’s the business’s UK brand in the commercial lines space which isn’t going to change. Addressing whether or not RSA’s new ownership might lead to further changes in staffing, following the voluntary redundancy scheme announced by the business in Q3 2020, Egan noted that it’s simply not possible to say yet what, if anything, will happen in this respect.
“None of us knows what the future holds,” he said, “but what I would say is - cost is only one of the levers that we have to be competitive on. I highlighted, when I first took this job, that we could be more efficient and productive - and that has been one of our aims, but not our only aim. I think you can see that with some of the other scores that I’ve identified in terms of customer and culture as well. So, of course, it’s an area that we can’t be complacent on but it’s not the only area that we’re focused on, although I appreciate the sensitivity that it has when you have to take difficult colleague positions.”
Looking forward, Egan addressed the plans in place following the deal and that, considering Intact did not previously have a presence in the areas in which RSA’s UK&I business works, this is a new venture for them as well. In a practical sense, he said, the next steps couldn’t quite be called an integration, though certain changes have, of course, been made, including the implementation of a new limited company board, chaired by Mark Hodges.
The big push has been getting the businesses used to each other and working together towards a common goal, he said, which has been made more difficult by COVID but, like so many businesses, RSA and Intact have made new channels of communication work for them. Though the team is getting used to changing ways of doing meetings and performance agendas, Egan emphasised that the business’s partners are not going to see any sudden changes in the insurer’s strategy. There will be certain “tweaks” going forward but that would have been the same whether or not RSA came under Intact ownership.
The business’s growth areas and growth targets remain the same, he said, and include its regional broker business, which saw its new business levels up 40% to 50% in 2020, and which are continuing to grow. Its retention levels in the regional broker business were just under 90%, which is fantastic, Egan said, and not something the team take for granted as they continue to look to grow.
“The second area is our commercial lines business where we want to be stronger and, I think, the area where we have the biggest gap is in the SME business,” he said. “We would like to be a stronger player and a more dominant force in the SME market in the UK. And I think that we are working thoughtfully on how best to achieve that, looking at sectors of the SME market, looking at the best way to distribute products, looking at the products themselves… [though] it’s an area still in the ambition stage rather than the reality [stage].”
Looking at the personal lines space, Egan said that where RSA has, as yet, an unfulfilled ambition is in the motor space and he would love to have a strong motor proposition in the marketplace. It’s an area that he and his team are giving a lot of thought and attention to, he said, and it’s exciting to be working alongside a company like Intact which, as a market leader in motor within the Canadian marketplace, will have a lot of knowledge and expertise that RSA UK&I will be able to leverage.
While the business will be exploring such new opportunities, however, one thing Egan noted will not be changing is the UK&I business’s focus on its partnerships. Under Intact ownership, he said, there will be a real chance for the businesses to learn from each other about what a truly successful broker proposition looks like, and he reiterated that brokers always have been and continue to be at the heart of RSA’s commercial lines business.
“And some of the comments that I’d had, that I think were a testament to our frontline staff, was that the brokers themselves didn’t feel that we were going through any sort of transaction… We haven’t missed a beat in terms of service and our commitment to them,” he said. “That doesn’t mean to say we get everything right but what we haven’t been is a distracted organisation, which is one of the things that can happen during transactions.
“But we need to keep pushing ourselves to do a better and better job with our brokers. Our regional [business] in particular, is a good evidence point to say our business goes from strength to strength and I would like to see that continue. I think there’s lots of headroom to grow into, we can be better, and our aim is to do that. But I will continue to thank [our brokers] for their support for RSA.”