Aiming to Be Better Before Bigger

Stephen Hester

There are no plans for acquisitions on the immediate horizon for RSA in Canada, its global ceo says. Stephen Hester told Thompson’s that the group is looking to become better, and not necessary bigger. 

"Many companies in the Canadian market are expanding or seeking to expand by acquisition and indeed RSA has done that in the past," Mr. Hester said in an interview last week in Toronto.

"Our focus for the next few years is to get better because I don’t think that our business should be buying customers. 

"Effectively, when you buy another company, you are buying customers," he said.

"I want our capabilities to be so good that the customers come to us organically. We don’t have to buy them — they come to us because they want to deal with us."

He said Canada offers a sophisticated and attractive economy and insurance market and RSA feels it can continue to be successful here.

RSA is one of the top 10 private p&c insurance companies in Canada, and posted one of its most successful years ever last year with after-tax net income of $156m and a combined ratio of 94.4% on direct written premiums of almost $1.6bn. 

Mr. Hester said acquisitions won’t be ruled out forever in Canada. But such moves will only be back on its agenda when capabilities in all key areas are "up with the best."

"We will be investing more than $300m, not in buying other companies but improving our own capabilities to serve our customers well."

By ‘customers,’ he is referring to both brokers and policyholders.

Mr. Hester said RSA will be improving its technology, including major investment in its claims systems.

And it will also be improving "the simple delivery of our propositions to our brokers — making slicker, faster, quicker turn-around times so more can be done on the Internet and there’s less that needs paper being pushed around."

 

This article originally appeared in Thompson’s World Insurance News.

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