UK insurer RSA announced it is exiting the UK personal lines motor market to focus on its core lines.
The company explained the move by saying that the personal lines motor market in the UK remains extremely competitive and requires significant scale to drive meaningful outperformance. UK motor business represents approximately £120 million ($147.1 million) of annual premium for RSA.
On the other hand, RSA said it is a leading provider of personal lines home and pet insurance and holds strong positions in these markets.
“When we completed the acquisition of RSA, we were clear that we would take necessary actions to drive sustainable outperformance in UK&I [UK & Ireland],” said Charles Brindamour, chief executive officer, Intact Financial Corp., RSA’s parent company. “Today’s announcement represents a further step in delivering against our strategic roadmap to optimize our footprint around personal lines Home and Pet, and our Commercial and Speciality lines businesses.”
RSA also intends to drive cost improvements by leveraging ongoing investments in technology and through further simplification of the business.
The exit includes an agreement to introduce RSA’s MORE THAN direct motor customers to Swinton Insurance, a brand of Atlanta Insurance Intermediaries Ltd. and part of Ardonagh Retail, upon renewal.
The results of the UK personal lines motor portfolio will be reported in exited lines from Q1 2023 onwards.
In 2023, RSA expects the combined ratio of the continuing UK&I business to be in the mid-90s. Restructuring costs of approximately £35 million ($42.9 million) are expected in Q1 2023, mostly related to a one-time write-off of intangibles.
Proceeds from the agreement with Swinton will be received as policies are renewed and are not expected to be material.
RSA said it expects to release approximately £60 million ($73.6 million) of capital held against motor-related insurance risk over time as the portfolio runs off.
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