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RSA's head of London Market Steve Watson (pictured) talks about the role of his business in meeting the group's global specialty lines goal of $10 billion gross premium in just seven years, double digit growth in 2023 and post-takeover cultural shifts.
Insurer RSA’s London Market business has “double-digit growth dialled into the plan” for 2023, as it gears up to fulfil its significant role in group ambitions to achieve $10 billion gross premium income in global specialty lines over the next seven years.
This is according to Steve Watson, managing director of London Market business at RSA, as he spoke to Intelligent Insurer about what has changed since the business was taken over by Intact Financial Corporation (Intact) in June 2021.
Intact, a large provider of property and casualty insurance in Canada, purchased RSA Group’s Canada, UK and International entities more than 20 months ago. It was part of the same mergers and acquisitions deal in which Scandinavian insurer Tryg A/S bought RSA’s Swedish and Norwegian businesses, separating them from those now owned by Intact.
While Watson was clear that the business was already on a decent trajectory prior to the acquisition, a post-takeover reset of values has introduced a different kind of approach: an “outperformance mindset”, he said.
Aligning RSA’s value with those of Intact has put more emphasis on not being satisfied with being average within the pack of your competitors, he explained, adding that it was something the now parent company is well-versed in.
“What I have seen, and what RSA now strives for, is to consistently outperform the pack. With that will come all the cyclical ups and downs of market trends but very much looking to always do better than your competitor. That’s definitely a mindset shift that wouldn’t have existed within the RSA organisation prior to the acquisition,” he added.
RSA’s global specialty lines goals are ambitious. But Watson felt that the London Market business has “earned the right to grow”, referring to its consistent underwriting discipline and performance.
Growth plans for 2023 are already underway and, he said, the London Market business has more growth plans in place for 2024, 2025 and beyond.
“This year, we have double digit-growth dialled into the plan, we have an investment roadmap that will continue to invest in our talent, and we will invest in some new capabilities along the way as well. That aligns very nicely to the broader global specialty lines level,” he explained.
Commenting on the 2023 growth for the London Market, he said: “I’d put a figure of anywhere between 12 and 20 points of growth across the year. I give that sort of range because within that figure there will be a proportion that will be inflationary indexation, as well as net new customer acquisitions.”
Before the deal Intact had no presence in the UK, so the transaction was motivated by the Canadian P&C insurer wanting to gain a foothold in the UK market, Watson said.
“The takeover has provided three key things: scale; greater access to expertise; and real belief in long-term ambition.” Steve Watson, RSA
Soon after the deal, RSA’s London Market and European specialty lines teams joined Intact’s existing global specialty team to create Intact’s Global Specialty Lines business.
“There was none of the usual sort of internal machinations of trying to fit two sets of organisations into one. In that regard it was a very smooth transaction. It has enabled RSA to look forward and continue to improve its operational rigour,” Watson said.
For the London Market part of the business, he said, the takeover has provided three key things: scale; greater access to expertise; and real belief in long-term ambition.
“We’re now part of a global specialty lines franchise within Intact. We have significant books of business, obviously in the UK but also across North America, as well as business across Europe. When you bring all that together, we’re just over $5 billion of gross premium today.
“Straight away, we get the scale benefits that come from being part of a global platform. We also get access to a far broader set of capabilities and expertise that wouldn’t have been available to us before.
“A key thing that Intact has brought to us is a real belief in a long-term ambition, and that’s crucial for a specialty business. That commitment to a long-term strategy in the market is absolutely vital in terms of our credibility,” he concluded.
For more on RSA’s post-M&A changes, strategic plans and how it is future-proofing its digital and data capabilities, watch the full video interview above.
Steve Watson, RSA London Market, Specialty lines, Growth, Cultural shifts, Property, Casualty, M&A, Strategy, Insurance, Reinsurance