Intact Financial Corporation and RSA announce exit from UK personal lines motor market

Agreement with Atlanta Group for MORE THAN direct motor renewalsUK Personal Lines business to continue focusing for performance in Home and PetOngoing technology renewal and simplification to drive efficiency across the platformUK & International business accelerates its path to deliver a low-90s combined ratio

Intact Financial Corporation and its subsidiary RSA, have announced (28 March 2023) initiatives aimed at improving the strength and sustainability of the UK & International business.

The personal lines motor market in the UK remains extremely competitive and requires significant scale to drive meaningful outperformance. After a thorough review, RSA is exiting the UK Personal Lines motor market, representing approximately £120 million of annual premium for the company. The exit includes an agreement to introduce MORE THAN direct motor customers to Swinton Insurance, a brand of Atlanta Insurance Intermediaries Limited (Swinton) and part of Ardonagh Retail, upon renewal.

RSA is recognized as a leading provider of personal lines Home and Pet insurance and holds strong positions in these markets. We will continue to optimize our position in Home and Pet by improving segmentation, focusing on growth in the direct business and managing partnerships for value. We also intend to drive cost improvements by leveraging ongoing investments in technology and through further simplification of the business. With these actions, as well as the exit from the UK Personal Lines motor market, we expect muted top-line growth as we accelerate our path to deliver a low 90s combined ratio for the UK&I.

“When we completed the acquisition of RSA, we were clear that we would take necessary actions to drive sustainable outperformance in UK&I,” said Charles Brindamour, Chief Executive Officer, Intact Financial Corporation. “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.”

“Our primary focus now is on delivering an orderly transition that supports our colleagues and customers,” said Ken Norgrove, Chief Executive Officer, RSA UK & International. “We have incredibly talented people working in this business, and we’re committed to treating them with fairness and respect.”

Financial Impact

The results of the UK Personal Lines motor portfolio will be reported in Exited lines from Q1 2023 onwards.

In 2023, we expect the combined ratio of the continuing UK&I business to be in the mid-90s.

Restructuring costs of approximately £35 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.

We expect to release approximately £60 million of capital held against motor-related insurance risk over time as the portfolio runs off.

All key metrics related to the RSA acquisition remain largely unchanged, including internal rate of return (IRR) above 20% and NOIPS1 accretion of approximately 20%.

Authored by Intact Financial Corporation and RSA