General Insurer of the Year - Royal & SunAlliance - A right royal success

- By Insurance Post Staff
- 13 Jul 2006
- Indicative reading time: 4 minutes

Three consecutive years of positive results have seen a turnaround in Royal & SunAlliance's fortunes, which, Jonathan Swift says, is no mean feat in today's competitive market - and the judges agreed

For Royal & SunAlliance, the winning of the General Insurer of the Year award is a just reward for a successful and well-managed turnaround in the company's fortunes, and is testament to the management's persistence and vision.

Having suffered in the late 1990s and early 2000s, the company now stands proud again at the pinnacle of the UK insurance market. It has recorded three consecutive years of positive results under the stewardship of group chief executive Andy Haste and, in the UK, latterly Duncan Boyle and now Bridget McIntryre.

In 2005, the UK business - made up of R&SA for intermediated business and More Th>n for direct business - contributed an underwriting profit of £154m, up 62% on 2004. R&SA's commercial business recorded a remarkable percentage of that figure, £115m, while the combined ratio of the overall UK business improved to 93.1% (2004: 96.3%).

What has triggered this remarkable success story? R&SA set out a number of objectives on which this success has been founded.

Firstly, the company made the decision to concentrate solely on general insurance, and within that remit focused on market segments where it believed it could offer a specific value proposition. It also moved to improve and sharpen its product offerings, underwriting and performance management regime.

Secondly, the company reviewed its proposition to truly reflect what it believed customers and brokers need to help drive top-line performance across the cycle, with pricing discipline key to this.

Alongside this, R&SA led the way with technological innovation and has been instrumental in the development of I-market, distributing its first commercial product through the portal last year. In addition, it developed an online commercial proposition for small business.

The insurer also utilised its international presence to grow the business, a move that saw its transfer Chilean insurer Cruz del Sur's marine portfolio to the UK after acquiring it in October 2005.

With regards to developing and extending its brands, R&SA now boasts that four in five people recognise the More Th>n brand and it has also won and retained several affinity deals, including Halfords and Yorkshire Building Society. However, R&SA's win in this prestigious category was not just based on its financial results, product and proposition development. The insurer's individual policyholders, brokers and prospective commercial partners have noticed the turnaround too.

A survey of 1000 brokers found that intermediaries' satisfaction with the insurer had increased by the largest margin. On the claims side, by creating a single function, the company recorded upper quartile customer satisfaction for speed of resolution and expectation management.

This claims provision overhaul has not only been recognised by R&SA as a key contributor to its sustained growth but also by Lloyds TSB Insurance and Co-operative Insurance Society, with whom R&SA has developed commercial active supply chain management solutions, widely accepted as industry firsts.

Never does an insurer's claims department come under more scrutiny than in times of disaster. In response to the Buncefield explosion last year, R&SA was asked by the Association of British Insurers to represent the industry at residents' meetings - a subsequent survey of household customers found that it had met expectations in 100% of cases.

Moreover, a host of independent research has shown that More Th>n delivered more than customers expected, and its Sunderland call centre won North-east Contact Centre of the year. Mystery shopping exercises that benchmark More Th>n against rivals showed a significant increase in the insurer's overall performance.

It may be a cliche but insurers are only as strong as the staff they employ and R&SA is no exception. In total, R&SA's UK business contributed 48.7% of the group's net written premium but 58.5% of the underwriting results, an achievement it managed with only 42% of the group workforce. All UK employees now have a proportion of their pay linked to personal performance and R&SA has invested heavily in training.

These impressive developments have been acknowledged by ratings agencies. AM Best upgraded the insurer outlook from 'negative' to 'stable' in March 2006, and Moody's from 'stable' to 'positive'.

This made an impression on the British Insurance Awards judges, with one commenting: "This serious improvement during the past few years should be rewarded." Others added that R&SA was both a "full width insurer", in that it did not only underwrite safer smaller business but the full gambit of risks, and that it was "a good employer with good employment relations".

R&SA has regained its crown, having been in danger of being dethroned as a serious UK player. It has made tough decisions, including the recent announcement of 1000 UK job cuts, but if it achieves its aim of being cheaper and easier to do business with, employees, shareholders, brokers and customers will ultimately be happier. For these reasons, the company has rightfully been lauded as General Insurer of the Year 2006.