Blog: Ex-RSA CEO Simon Lee, the David Moyes of insurance

Aon-sponsored Manchester United shirts

It is fitting that in the week where David Moyes credentials as Manchester United manager are being sorely questioned following a run of home league defeats, Simon Lee has resigned as group chief executive of RSA.

Moyes has the uneviable task of replacing Alex Ferguson, while Lee had his own difficult act to follow in Andy Haste, the man who took RSA from the post-Mendelsohn doldrums and made it a respected insurance powerhouse once again.

The difference is that while Manchester United still has obvious goals in winning trophies and selling more shirts to overseas fans; RSA has very much been at a cross roads for a number of years now, with the mantra of "evolution, not revolution" hardly one to wet investors' appetite.

It could have been so different, but once the RSA bid for Aviva's UK, Irish and Canadian business had been rebuffed in 2010, the insurer was left in insurance limbo, and having been unsuccessful in attempting to take the next step up the top 100 global insurer ladder, Haste took flight for a challenge elsewhere.

Haste may have fancied running an enlarged RSA and taking it to the next step, but the prospect of "more of the same" did not appeal.

Lee was the perfect successor on paper given that he had been running the part of the business with the greatest recent growth in the international arm. He had also worked with Haste for years and knew the business inside out.

He may not have been the "sexiest" pick [as was Moyes], but those with longer memories will remember that Haste's appointment was met with shrugs of shoulders back in 1999, when he joined from Axa with little fanfare.

The difference between the tasks facing Haste and Lee were great though because RSA could really only go up in the early noughties, and although Haste deserves the plaudits for manouvering the insurer out of the murky waters of the post-merger bad years, in truth he did what any right thinking CEO would have done given the same task: shrinking to greatness by re-focusing on the group's core business and territories.

Lee came in with the group performing solidly, with its ambitions very much mapped out by niche acquisitions like Oak Underwriting and Noble Underwriting Agencies, rather than the bigger fish of Aviva or AIG's Latin US business. Indeed speaking to Post in his first interview as CEO Lee said: "Big acquisitions, while they can transform your business, are inherently more risky than bolt-ons."

As such the rumour mill has been cranking up gradually since Lee took over, with many analysts reaching the conclusion that Lee was a safe pair of hands to manage RSA until a decent bid came in for the group and it was sold. Rightly or wrongly, if RSA was not going to buy big, market commentators have long felt the only route left open to it is to be bought.

For brokers this would obviously be bad news, and it rings true that in the wake of Independent Insurance's collapse, intermediaries rallied behind RSA from 2000 to 2003 to make sure that this significant market was retained despite concerns.

And no doubt the same will be true today despite the recent reserving issues discovered in Ireland and share price collapse. The ongoing takeover rumours do not help the situation, but for now that is what they are, just rumours. And these have been around as long as I have been at Post.

The only shame if RSA inevitably steadies the ship is that Lee will not be there to reap any rewards, as today he became the latest fall guy for the ongoing problems facing the insurer.

While Haste always seemed to think he was "too big" to talk to trade journalists, Lee was always more approachable and happy to share his thoughts on his business and the market. Although he may not have made his mark on the City in same way as Mark Wilson, CEO at Aviva has, Lee inherited a business that was not in turmoil as RSA was in 1999, or Aviva has been in recent years, so there was less scope for him to make his mark.

We now wait to see who turns up at RSA, with the smart money on an outsider coming in, given that many investors have lost faith with the current set up. Whether they end up running an independent RSA; or handling the transition into Zurich, Allianz, Generali, for example, this will be one of the ‘must follow' industry narratives of the 2014.


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