Upon announcing a jump in profits for 2004, Royal & SunAlliance, Britain's second-largest general insurer, has indicated its intention to sell its US automotive insurance unit later this year.
Royal & SunAlliance’s improved performance was attributed to the success of a large-scale restructuring process which began in 2003. RSA’s balance sheet, which showed a full-year operating result of GBP456 million, has been boosted by the disposal of businesses in the US. In addition, RSA has cut over 2,000 jobs in recent years and sold off its with-profit policies.
With the fresh plans to sell its last US unit, the London-based insurer now looks set to continue with a strategy that has brought its financial recovery. RSA is intent on reserving its focus to the markets in the US, while concentrating on the UK, Canada and Scandinavia.
Although RSA’s chief executive, Andy Haste, did not specify the value of the US division, which insures low- to middle-income drivers in the US, he did suggest that a deal could be concluded in 2005. The company is reported to have hired investment bank Lazard to advise on the sale of the unit. Mr Haste, however, chose to concentrate on the company’s positive financial results.
2004 has been a year of substantial progress for the group, stated Mr Haste. We’ve driven strong operational performance and delivered against the strategic commitments we set out for the group 18 months ago. Our strategy for the future is clear – to run general insurance businesses where we have strong market positions and where we can deliver sustainable profitable performance.