RSA Insurance Group

RSA Insurance Group plc

Type	Public limited company
Traded as	LSE: RSA
Industry	Insurance
Founded	1996
Headquarters	London, United Kingdom
Key people	John Napier (Chairman) Simon Lee (CEO)
Revenue	£7,924 million (2010)[1]
Operating income	£598 million (2010)[1]
Net income	£355 million (2010)[1]
Employees	21,000 (2010)[2]
Website	www.rsagroup.com

RSA Insurance Group plc (LSE: RSA), commonly known as RSA, is a global general insurance company headquartered in London, United Kingdom. It has over 20 million customers in 36 countries across Asia, Europe, North America and South America.^[2]

RSA is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

History

• 

  Royal Insurance war memorial, now relocated to the National Memorial Arboretum
• 

  Sun fire insurance plaque on display at Bedford Museum
• 

  Alliance fire insurance plaque in Bedford Museum
• 

  Royal Insurance logo used in Canada, 1857

RSA was formed following the merger of Sun Alliance and Royal Insurance in 1996.^[3] Sun Alliance was itself a product of the merger in 1959 of The Sun, which was founded in 1710, with The Alliance, which was founded in 1824 by Nathan Mayer Rothschild and Moses Montefiore.^[4] Sun Alliance went on to acquire London Assurance in 1965 (becoming Sun Alliance & London)^[4] and Phoenix Assurance in 1984.^[5]

Royal Insurance was founded in 1845.^[4] It acquired Liverpool & London and Globe Insurance Company in 1919.^[4] The company formally changed its name from Royal & Sun Alliance Insurance Group plc to RSA Insurance Group on 20 May 2008.^[6]

In March 2009, RSA announced plans for the shedding of 1,200 jobs from its UK operations, a reduction of around 15%.^[7]

Operations

RSA provides insurance products and services to over 20 million policyholders.^[8] It has the ability to write business in 130 countries and has direct operations in 27 countries.

RSA is the second-largest general insurer in the United Kingdom. Its global headquarters are in the City of London on Fenchurch Street and the headquarters of its UK operations are on Leadenhall Street. Its registered office is in St Mark's Court, Horsham. Other key UK offices are located in Liverpool, Bristol, Manchester, Chelmsford, Glasgow, Cardiff, Sunderland, Belfast, Peterborough, Halifax, Croydon and Birmingham. RSA, including its More Th>n brand, announced itself to be the first carbon neutral insurance company in the UK on 2 December 2006.^[9]

RSA owns the More Than direct car, home, pet and travel insurance brand in the United Kingdom, recognised widely for its former Lucky The Dog advertisements and its "MORE IS ..." campaign. More Th>n also sells van, business car, shops and offices and business insurance through its More Than Business operation.^[10]

Offices

Asia & Africa Bahrain People's Republic of China Hong Kong India Oman Saudi Arabia Singapore United Arab Emirates

Europe Channel Islands Denmark Estonia Germany Republic of Ireland Norway Latvia Lithuania Italy Russia Sweden Poland United Kingdom (head office)

North America and Caribbean Canada Mexico Netherlands Antilles Aruba

South America Argentina Brazil Chile Colombia Uruguay

Controversies

Asbestos liabilities

In January 2002 Royal & Sun Alliance became involved in litigation over claims for injury arising from asbestosis among workers in Clyde shipyards. The workers alleged that between 1972–1977 R&SA had issued insurance certificates to asbestos manufacturer Turner & Newall but excluded cover for asbestosis, in breach of the Employers' Liability (Compulsory Insurance) Act 1969. R&SA responded that asbestos-related injury was excluded from the policy because it was a risk the company was not willing to underwrite, that Turner & Newall was instead self-insured against asbestosis and should therefore be responsible for any compensation.^[11]

In February 2002 R&SA set aside £384 million to double its reserves available for asbestos claims which, combined with claims of £215 million arising from the 11 September attacks, wiped out its 2001 profits.^[12][13] R&SA put up seven of its subsidiaries for sale in an attempt to raise a further £800 million to cover liabilities for asbestos insurance claims in the United States.^[14] Friends Ivory & Sime subsequently acquired R&SA's UK asset management subsidiary in May 2002 for £240 million.^[14] The situation was further compounded by R&SA having to reserve £1.2 billion against liabilities for guaranteed annuities, the product which caused the collapse of Equitable Life, and was also facing a fine from the Financial Services Authority for failure to meet the deadline in the pension mis-selling review.^[15] Two months later Friends Provident acquired R&SA's offshore life unit International Financial Services Limited, based on the Isle of Man, for £133 million.^[16] In July 2002 R&SA sold its group risk business to Canada Life for £60 million.^[17] R&SA was forced to close its life business, with the loss of 1,200 jobs, in August 2002.^[18]

In November 2002 Turner & Newall launched a suit against R&SA on behalf of former employees who had suffered asbestos-related disease, claiming that the insurer was liable because it provided employer liability policies to the engineering firm.^[19] In an effort to reduce costs, R&SA chairman Sir Patrick Gillam said it would sell its US business RSUI and "float most of its Asia Pacific operations", bringing total job losses in the UK to 4000.^[20] The case was heard at the High Court of Justice in January 2003.^[21] R&SA argued that a policy clause which excluded cover for pneumoconiosis also excluded other asbestos-related disease such as asbestosis and peritoneal mesothelioma. Colin Edelman QC, representing T&N, told Mr Justice Lawrence Collins that the defence which R&SA had the "temerity" to put forward was "just ridiculous" and that the insurer was trying to "wriggle out of its liability."^[22] On 9 May 2003 the court ruled that R&SA was liable for the compensation claims.^[23] In September 2003 R&SA cut 1,000 jobs in the UK and asked shareholders for £960 million to cover further asbestos claims.^[24]

Alleged financial irregularities

In February 2011, RSA and Provident Insurance came to a public disagreement over subrogated motor repair costs, the dispute involves the alleged inflation of costs through RSA subsidiary Motor Repair Network Management^[25] Such issues include the charging of collection and delivery fees for drivable vehicles, addition of sundries in excess of £100, this has led to a number of insurers refusing to pay RSA for their claims without sight of documentation. RSA in turn has refused to provide the documentation that a number of insurers have requested to resolve the claim and have passed their files to Lyons Davidson to litigate.

In September 2011, Judge Platt of the Romford County Court in his judgement attacked the method in which RSA recovered their costs by putting a subsidary within the motor claims process to inflate profits. Several insurers are now refusing to pay RSA's requests for payment without sight of the original invoice.^[26]

References

1. ^ ^{a b c} Preliminary Results 2010
2. ^ ^{a b} "Group Facts". RSA Group. http://www.rsagroup.com/rsa/pages/aboutus/groupfacts. Retrieved 23 August 2010. 
3. ^ Smooth merger of Sun Alliance and Royal Insurance The Banker, June 1996
4. ^ ^{a b c d} RSA Insurance Group History
5. ^ Codan
6. ^ Royal And Sun Alliance weathers the insurance storm Telegraph, 5 March 2008
7. ^ RSA to cut 1,200 jobs Telegraph, 26 February 2009
8. ^ RSA Insurance Group Products
9. ^ Royal & Sun Alliance is carbon neutral Carpages, 2 December 2006
10. ^ More Th>n
11. ^ Reynolds, James (25 January 2002). "Insurer rejects asbestos claims". The Scotsman (Edinburgh): p. 13. 
12. ^ Treanor, Jill (1 March 2002). "Royal & Sun forced into sell-off as profits evaporate". The Guardian (Manchester): p. 27. 
13. ^ Bevens, Nick (28 February 2002). "September 11 wipes out profits at R&SA". Edinburgh Evening News (Edinburgh): p. B.2. 
14. ^ ^{a b} Dey, Iain (1 May 2002). "FIS doubles funds with £240 million R&SA deal". The Scotsman (Edinburgh): p. 1. 
15. ^ Bain, Simon (12 June 2002). "Royal & Sun edges towards £800m target for disposals". The Herald (Glasgow): p. 19. 
16. ^ Andrews, Bill (11 June 2002). "City round-up: Rival to buy R&SA offshore life unit". Edinburgh Evening News (Edinburgh): p. 8. 
17. ^ "Royal & Sun sells group risk". The Guardian (Manchester): p. 17. 30 July 2002. 
18. ^ Senior, Antonia (9 August 2002). "Stricken insurer cuts jobs and shuts life business". The Times (UK): p. 25. 
19. ^ Bevens, Nick (1 November 2002). "R&SA shares plunge over asbestos fight". Edinburgh Evening News (Edinburgh): p. 2. 
20. ^ Bevens, Nick (7 November 2002). "Insurance giant to axe 900 jobs". Edinburgh Evening News (Edinburgh): p. 1. 
21. ^ Snowdon, Neal (22 January 2003). "It's D-day in death dust cash battle". Manchester Evening News (Manchester). 
22. ^ Stewart (28 January 2003}first=Stephen). "Insurers accused of shirking liability to asbestosis victims". The Herald (Glasgow): p. 8. 
23. ^ "Damages fight goes on after ruling success". The Northern Echo (Darlington): p. 8. 12 May 2003. 
24. ^ Slattery, Laura (5 September 2003). "Royal & Sun Alliance cuts 1,000 jobs in UK". The Irish Times (Dublin): p. 51. 
25. ^ http://www.postonline.co.uk/post/news/2026677/rsa-embroiled-legal-row-credit-hire
26. ^ http://www.bbc.co.uk/news/business-14946628

External links

Companies portal

• RSA Insurance Group