RSA life insurance review

“RSA Insurance Group” is a general insurance company that has headquarters in London, United Kingdom. The company is traded on London Stock Exchange and belongs to FTSE 100 index that unifies 100 most highly capitalized companies in United Kingdom. The company was formed as a merger between “Royal Insurance” and “Sun Alliance” in 1996. Although the company has its origins in London, the businesses are expanded throughout the world: Ireland, Scandinavia, Central and Eastern Europe, Canada, Asia, Middle East and Latin America. The company runs business in 130 countries and serves 17 million customers. “RSA Insurance Group” was able to survive even the most serious market condition and write premiums that are worth £7.5 billions. The company is the largest commercial general insurer in United Kingdom and works with legal entities of all sizes: from small and medium enterprises to the most famous brands. The company also is the fourth largest personal insurance provider in United Kingdom and sells home, motor and pets insurance. These insurance is sold via brokers and also under a private brand “More Than”.

Suspended life insurance business

In United Kingdom the company provides a number of services. “RSA Group” provides property damage and business interruption insurance, motor and marine insurance and many more. Previously “RSA Group” offered its customers life insurance. However, a company wanted to concentrate more on its strategy to become a leading life insurance provider and decided to discontinue life insurance business. The decision to sell life insurance business was caused by many reasons. First of all, the slow down in life insurance market and constantly decreasing share prices. What is more, the company faced difficulties in United States because of tighter regulation and a huge number of successful claims on life insurance policies. Last but not least “RSA” company meddled in the asbestos scandal that had significant repercussions in the media. The company was involved in litigations over the claims for injuries from asbestos. The workers of asbestos manufacturer “Turner & Newall” had life insurance certificates from “RSA” company. These contracts excluded illnesses and death caused by asbestos because “RSA” company believed that taking this kind of risk is not wise. However, the court ruled out that “RSA” company has to accept claims from “Turner & Newall” workers. In 2002 the company had to set aside £384 millions for asbestos related claims and £215 millions more for claims of deaths caused by the September 11th attacks. This amount of reserves was equal to the profits of the company in 2001. Later the company had to put aside £800 millions more for further incoming asbestos claims. The company started selling its subsidiaries but faced another problems: guaranteed annuities became due. The company owed £1.2 billions to people that just retired. It was forced to close “Equitable Life” business and got a severe fine from FSA (Financial Services Authority). Because of all these factors the company closed its life insurance business in 2002.

Further expansion

At the moment, “RSA” company is not interested in expanding its life insurance business. On the other hand, “RSA Group” further concentrates on the strategy to expand general insurance business. As a result, the company made a bid to buy general insurance business from “Aviva” in Canada, Ireland and United Kingdom. However, this bid was rejected by “Aviva” company, who wants to maintain a composite model that includes both life and general insurance businesses. The company believes that composite model allows achieve more synergies and generate more cash. 

“More Than”

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Although “RSA” backed up from life insurance it now has a direct subsidiary company “More Than”. The company is a private brand and is used to provide insurance for citizens Kingdom. “More Than” is offering various types of life insurance and life insurance is only one of them. Besides life insurance “More Than” offers motor, home, pet, travel insurance policies through phone and Internet. Van, shop, office, business car, hotels, property, club and contractor insurances are offered directly to small and medium enterprises.
Recently both “RSA” and “More Than” became famous as the first insurers in United Kingdom to become carbon neutral. These companies reduced their carbon footprints more than twice and bought voluntary carbon reduction in order to eliminate the damage of the remaining carbon.