Insurance Age - RBSI reports 9% slump in operating profit

Insurance Age - RBSI reports 9% slump in operating profit: "RBSI reports 9% slump in operating profit

RBSI reports 9% slump in operating profit

Royal Bank of Scotland Insurance this morning reported a 9% decline in operating profit to £683m on stable income of £5.6bn. The insurance group was impacted to the tune of £274m by the floods.

The UK combined operating ratio for 2007, including manufacturing costs,increased to 98.0%, reflecting a higher loss ratio and the reduction in partnership income.

Excluding the impact of the floods, the combined operating ratio was 91.9%. The insurance group has 6713 million in force own brand motor policies (2006: 6790 million); 3752 million non motor policies (2006: 3759 million) and 9302 million partnership and broker policies (2006: 11 242 million).

In a statement in continued: “Our own-brand businesses have performed well, with income rising by 1% and contribution growing by 4%. Excluding the impact of the floods, own-brand contribution grew by 24%.

“In the UK motor market we have pursued a strategy of targeting lower risk drivers and have increased premium rates to offset claims inflation, improving profitability by implementing heavier price increases in higher risk categories.

“Our international businesses performed well, with Spain delivering strong profit growth while, in line with plan, our German and Italian businesses also achieved profitability in 2007. Home insurance grew across all of our own brands in the second half, and we achieved particular success in the distribution of home policies through our bank branches, with sales up 40%.”

In its partnerships business, RBSI said it had concentrated on “more profitable opportunities” and have consequently not renewed a number of large rescue contracts. RBSI added that it had also pulled back from some less profitable segments of the broker market.

This resulted in a 17% reduction in in-force policies, but income fell by only 2%. Contribution from partnerships and brokers fell by 22% as a result of flood-related claims. Excluding the impact of the floods, contribution from partnerships and brokers increased by 18%.

RBSI concluded: “For RBS Insurance as a whole, insurance premium income, net of fees and commissions, was 2% lower at £4.9bn, reflecting modest growth in our own brands offset by a 5% decline in the partnerships and broker segment. “Other income rose by 11% to £734m, reflecting increased investment income. Total expenses were held flat at £963m. Within this, staff costs reduced by 7%, reflecting our continued focus on improving efficiency whilst maintaining service standards.

“A 5% rise in non-staff costs reflects increased marketing investment in our own brands. “Net claims rose by 1% to £4.01bn. Gross claims relating to the floods in June and July cost more than £330m, with a net impact, after allowing for profit sharing and reinsurance, of £274m.

“Excluding the impact of the floods, net claims costs were reduced by 7%. In the motor book, while average claims costs have continued to rise, this has been mitigated by improvements in risk selection and management and by continuing efficiencies in claims handling.

Insurance Age - Insurance industry executives confident in the face of credit crisis

Insurance Age - Insurance industry executives confident in the face of credit crisis: "Insurance industry executives confident in the face of credit crisis

Insurance industry executives confident in the face of credit crisis

Insurance executives were feeling confident about their ability to manage risks and opportunities at the onset of the credit crisis, according to a new global study conducted by Towers Perrin in conjunction with the Economist Intelligence Unit.

The study found that leaders of companies having “Excellent” enterprise risk management (ERM) ratings from Standard & Poors tend to be significantly less overconfident in their overall ability to manage risks and opportunities, compared with industry peers with lesser ERM ratings.

“The findings and timing of this study – especially within the context of the onset of the current credit market woes and broader economic landscape – underscore the challenges the insurance industry faces in managing risk and opportunity,” said Steve Taylor-Gooby, managing director of Towers Perrin’s Risk and Financial Services.

“Through the 20/20 vision provided by hindsight, we can say that many organisations in all business sectors underestimated risks or completely missed emerging risks, and that the levels of optimism and confidence the study revealed in the third quarter of 2007, as the current credit crisis and related economic issues were beginning to emerge, were not justified.”

Two hundred insurance industry executives were among the nearly 1,500 senior business executives who participated in the broad survey, including 69 whose firms have ERM ratings from S&P. The study sought to reveal what senior business managers consider the greatest threats to achieving their business goals, the most significant opportunities, and how confident they are in their ability to manage the risks and exploit the opportunities.

“Research conducted by behavioural scientists has consistently shown that people are almost always more confident in their estimates and predictions than outcomes warrant,” said Mr Taylor-Gooby. “A major benefit of a successfully implemented ERM program is that it tempers the potential for overconfidence and helps drive correct decision-making – both in the ability to manage risk and seize market opportunities.”

Survey participants, comprised of insurance company CEOs, CFOs, board members, presidents, managing directors and other senior executives, were asked to assess 27 internal and external forces affecting business performance in the areas of financial, people/workforce, operational and strategic issues.

Insurance companies’ broad range of approaches for monitoring a variety of risks across multiple dimensions, along with their ability to help mitigate and manage many of their clients’ risks, underscored their confidence, the survey indicated. As a result, insurance executives were at the top or near the top of the industries Towers Perrin surveyed in their confidence in managing various areas of risks and opportunities.

According to survey findings, 52% of executives from the insurance industry believe they are better able to manage all risks and opportunities than their peers, versus 51% of those leaders in other financial services and 47% of executives from the banking sector. Among all industry groups, only energy executives exhibited more confidence (54%).

Looking at specific risk categories, insurance executives were more confident about their ability to manage financial and people/workforce risks than all other industry groups, and among the most confident in their ability to manage operational and strategic risks.

However, executives from “Excellent” rated S&P insurance firms tended to be less overconfident (36%) than their peers with either “Strong,” “Adequate,” or “Weak” ratings (59%) in their ability to manage all risks and opportunities. Further, survey findings showed that only 14% of those companies rated “Excellent” by S&P were more willing to accept risk than their industry peers, compared with 31% with lesser ratings.

“Making good decisions requires a realistic view of what we know and what we don’t know. An ERM framework and the right tools for analysis can help executives make more informed decisions about which risks they want to avoid and whether they have the appetite to pursue opportunities to profit from certain risks,” added Mr Taylor-Gooby.

Insurance executives see several industry dynamics as potentially greater risks than a year ago, including “business development” (71%), “customer demand” (62%) and “competition” (50%). Those same executives indicated the biggest opportunity, according to the survey, is in the area of “technology.” Seventy-one percent of executives said that industry dynamic represents a greater opportunity versus a year ago.

Executives said “technology” is seen as an opportunity both in back-office (e.g. claims processing and claims management) and front-office applications (e.g. predictive modeling and strategic pricing).

In all four business force categories, insurance industry respondents see more opportunities than risks:

• Financial issues, including cost of capital, interest rates, credit (76% vs. 66%)
• People/Workforce issues, including skills, attraction, engagement (74% vs. 61%)
• Strategic issues, including business model, strategy, execution (72% vs. 60%)
• Operational issues, including business processes and infrastructure (69% vs. 56%)

“New risks and opportunities will continue to emerge,” said Mr Taylor-Gooby. “The challenge for all business leaders – whether they are in the insurance arena or in other industries – is to maintain a consistent approach to risk and opportunity management in both prosperous and challenging economic climates.”

The nearly 1,500 executives of mid- and large-size companies participating in the Web-based surveyed represent a cross-section of industries from around the globe, including banking, energy, healthcare, manufacturing, technology, retail, entertainment and professional services.

Post Online - Hastings revamps image

Post Online - Hastings revamps image: "Hastings revamps image

Hastings Direct has restyled its brand icon 'Harry' in a bid to maximise its online quote volumes.

The personal lines broker has been reviewing its growth strategy since being acquired by Insurance Australia Group in September 2006.

Managing director, Nick Potts, said: 'We've evaluated every aspect of the business and improved practices throughout. Our strengthened offering has been aligned to what consumers really want from an insurance provider and now is the time to deliver it.'

The new TV advertising campaign starts today on on ITV, Channel 4, C5 and Sky, supported by exposure in national press and specialist magazines.

Claire Day, Hastings Direct's marketing director, says the brand re-launch builds on Harry's heritage in addition to positioning it as a conduit for future growth.

'The brand's new proposition ranks Hastings as an insurance provider in-tune with its current and potential customer base and supports planned premium price offers and further product launches planned for the spring.'"

Post Online - Aggregator slams Direct Line 'offer'

Post Online - Aggregator slams Direct Line 'offer': "Aggregator slams Direct Line 'offer'
Aggregator slams Direct Line 'offer'

Internet aggregator Gocompare.com has slated Direct Lines latest market offering.

Hayley Parsons, managing director, said of Direct Line’s proposal to cap motor insurance premiums for new customers at renewal: ”This is another example of an offer that is actually very good for the insurer but doesn’t necessarily stack up for the consumer. I can imagine that Direct Line would be very keen indeed to retain a customer that hasn’t made a claim in twelve months, for the same premium.

“In reality, that customer should be looking around the market for a reduction in his or her premium to reflect another claim free year. In addition, Direct Line has had no additional administrative expense associated with that client as, to qualify for the deal, nothing must have changed on the policy. Our figures show that over 50% of drivers have changed at least one of the policy details stipulated by Direct Line in the last twelve months, and therefore would not qualify for this offer.”

She added: “Direct Line is coming up with ever more creative ways to stop customers walking away. Nine times out of ten Direct Line isn’t one of the cheapest insurers. In addition, they don’t provide a courtesy car as standard, so customers can often get a much better deal by shopping around. So the question is; do you want to pay the same as last year or do you want to save up to £200?”

“The only thing that puts your renewal quote in context is looking at how your premium and cover stacks up against a much wider group of insurers and these days that means using a price comparison site. Sites like ours have brought transparency into a market that was previously opaque.”

Post Online - Insurance prices to drop by 10% by end of 2008 – Stephen Catlin

Post Online - Insurance prices to drop by 10% by end of 2008 – Stephen Catlin: "Insurance prices to drop by 10% by end of 2008 – Stephen Catlin

Insurance prices will drop by 10% by the end of 2008 if it is still another light catastrophe year, Stephen Catlin has said.

“We felt that rates would be down by 10% at the end of 2008 and I can’t see the downwards trend stopping until we have an event,” Mr Catlin said in an interview with Reinsurance. “We’re seeing rates for wholesale business in the London market decreasing more rapidly than retail business,” he said.

“Rates for business written by Catlin in the US and other markets have kept comparatively higher due the orientation to retail business.”

For the 2008 renewals season Catlin’s UK-originated gross written premiums in the London market fell by 7%, although there was strong growth in the Bermuda, Catlin US and other international offices.

He added in a statement that he expected gross premium for the group’s Catlin Syndicate UK business to decrease slightly during 2008.

Earlier today the Bermuda-headquartered (re)insurer reported Catlin reported an 8% increase in net income to $462m, with a 24% jump in gross premiums written to $3.4bn. The combined ratio fell to 84% from 87%."

RBS resists pressure over key assets as rumours of sell-off hit share price - Scotsman.com Business

RBS resists pressure over key assets as rumours of sell-off hit share price - Scotsman.com Business: "RBS resists pressure over key assets as rumours of sell-off hit share price

RBS resists pressure over key assets as rumours of sell-off hit share price

ROYAL Bank of Scotland appears to be resisting calls to sell off key assets amid persistent speculation that it is reviewing its insurance and overseas operations.

Sources say that apart from the sale of Angel Trains, the rolling stock leasing company, it has no immediate plans to offload any of its major business units.

It is thought to be focusing on a "tidying up" of its newly acquired ABN Amro assets, which is likely to involve the disposal of some of these operations.

But rumours that RBS is planning to sell key divisions, from Direct Line Insurance to its stake in Bank of China, continue to surround the company and is putting downward pressure on its share price.

RBS unveils year-end results on February 28 when it is expected to unveil record profits of about £10bn. It may also announce a further write-down of up to £1bn on the back of the global credit crisis.

Some banking analysts believe RBS requires as much as £12bn to strengthen its balance sheet and restore its capital ratios, but chairman Sir Tom McKillop is believed to have told investors there will be no dividend cut or rights issue to raise capital.

One source said that Angel Trains will not be sold if the bank does not get the right price. It is expected to fetch between £3bn and £4bn.

While the bank appears to be unmoved by the market speculation, investors remain nervous, particularly about a cash call, and have pummelled the shares to a year low. They closed on Friday at 366.5p, a fall of 47% compared with a year ago, which was just ahead of its long pursuit of ABN Amro.

Analysts continue to speculate on the bank's strategy but admit that there is a lot of conjecture in the market. Leigh Goodwin, of Fox Pitt Kelton, said RBS could probably get £7bn for the insurance division but he was doubtful there were buyers in a market that is "bombed out on valuations".

He said: "I doubt they would sell it. I also doubt they would sell (the stake in] Bank of China. It makes no strategic sense."

He suggested that of all its disposable assets, Citizens in the US was arguably the most vulnerable.

One analyst said that selling Angel Trains would make little difference to the bank's needs.

But in a more supportive note, Derek Chambers at Standard & Poor's has discounted the need to raise capital externally.

"We believe that the group should be able to generate sufficient capital internally to increase its core capital ratio from the current admittedly low level," he says. He is targeting a 550p share price and rates the shares a strong buy.

Home Insurance | Churchill Insurance unveils new interactive microsite

Home Insurance | Churchill Insurance unveils new interactive microsite: "Churchill Insurance unveils new interactive microsite
13 February 2008

Churchill Insurance has re-launched its ‘Challenge Churchill’ microsite giving visitors the chance to play interactive games, test their Sudoku skills and enter a prize draw with the chance to win a Nintendo DS.

New games will be added to the site every month to keep the site fresh and engaging. Visitors will also be able to have their insurance questions answered by the iconic Churchill nodding dog.

Claire Foster, a spokesperson from Churchill Insurance says, “We have re-launched the microsite to ensure it offers visitors a fully interactive experience. We hope that people will have such fun playing the quizzes and games that when it comes to getting an insurance quote, Churchill will be front of mind.”

To access the microsite and for further details on Churchill’s car, home, travel and pet insurance visit: challengechurchill.com."

The Press Association: RBS unveils £10.3bn profits

The Press Association: RBS unveils £10.3bn profits: "RBS unveils £10.3bn profits

RBS unveils £10.3bn profits

Feb 28, 2008

Royal Bank of Scotland has unveiled a £2.5 billion hit from the credit crunch - but still hiked annual profits to more than £10 billion.

The UK's second largest bank said operating profits rose 9% to £10.3 billion in 2007, despite the turmoil in financial markets.

The company wrote off £1.6 billion in losses with a further £900 million-hit for ABN Amro, the Dutch bank bought by a RBS-led consortium last October, chief executive Sir Fred Goodwin said.

The group has an additional £2.5 billion in exposure to the specialist insurers underwriting the group's investments which have also been hit by the crunch, Sir Fred added.

Meanwhile RBS's insurance business - owner of the Churchill, Direct Line and Privilege brands - was hit for £274 million by the impact of last summer's floods, with operating profits slipping 9% to £683 million.

Despite the setbacks from last summer's turbulence and the crisis in the US sub-prime mortgage market, RBS's results bring the profits from four of the UK's "big five" banks to £27 billion so far. With just HSBC - the UK's leading bank - left to report, profits are set to at least match last year's £37.2 billion combined earnings.

Sir Fred said prospects for 2008 were "difficult to predict as ever" but added the bank had begun the year with "real momentum" following the deal for ABN. The RBS team beat off a rival bid from Barclays to win the battle for the Dutch bank last October with a 71 billion euro (£54.1 billion) bid and said it has identified a further 1.6 billion euro (£1.2 billion) in cost savings from the deal over the next three years.

There have been concerns in the City that RBS overpaid for the Dutch bank and questions over the bank's capital position following its investment losses and the acquisition. But Sir Fred said the ABN deal gave the group the "big attraction" of increased exposure to fast-growing economies in Asia. The bank's capital position remained within target ranges, while it also lifted its annual dividend 10%.

Although the performance was held back by the credit crunch - hitting results at its investment banking division - the bank partly offset the losses with the sale of businesses such as utility Southern Water last year.

The bank's more cautious approach to lending in the worsening economic environment also saw overall bad debt losses fall 1% to £1.87 billion. RBS, which owns the NatWest bank, added that retail banking profits rose 10% to £2.47 billion with deposit balances up 9%. The bank opened more than 975,000 personal current accounts last year. UK business banking also lifted operating profits 11% to almost £2 billion, offsetting the earnings decline elsewhere in the business.

Direct Line launches new business insurance range:

Direct Line launches new business insurance range

17/03/2008

Direct Line has launched a new range of business insurance products to provide comprehensive, competitive protection for small businesses.

Small businesses can be ruined by just one unfortunate event, such as a fire, theft, or a public liability claim, so people protect themselves and their livelihood with business insurance.

Business owners and landlords can now choose from Direct Line Commercial Insurance, which covers against buildings and equipment, loss of rent, and public liability; Direct Line Shop Insurance provides such cover as perishable goods and goods in transit protection, loss of money, and personal accident.

Direct Line Residential Insurance protects landlords against loss of rent, contents, and property owner's liability, and Direct Line Tradesmen Insurance offers professional tradesmen and craftsmen with complete protection against loss of earnings, including cover for their tools and equipment, and employer's and public liability.

All of the policies include access to 24 hour helplines for situations which can cause security breaches and requiring locksmiths and glass replacement, in addition to free advice on tax, employment law, legal issues, contracts, stress counselling, and medical and health emergencies.

There are also a range of optional extras available, such as additional personal accident cover or higher public liability protection, so that business owners can mould the policy their own individual needs.

Ups and downs as RBS rides the waves of credit crisis - Yorkshire Post

Ups and downs as RBS rides the waves of credit crisis - Yorkshire Post:

Ups and downs as RBS rides the waves of credit crisis

ROYAL BANK OF SCOTLAND, the UK's second biggest bank, revealed a sharp increase in profits to £10.3bn, but warned of further losses from the credit crisis.

Underlying 2007 profits rose nine per cent, but total write-downs on investments hit by last summer's financial turmoil and the United States sub-prime crisis rose to £2.5bn.

RBS's credit crunch losses totalled £1.6bn, while write-downs at ABN Amro – the Dutch bank it bought last year – were £900m.

RBS said its investment banking division had been held back by the turmoil in credit markets, although the bank managed to counter the losses with the sale of businesses such as utility Southern Water last year.

Despite the deterioration in the economic environment, a more cautious approach to lending saw RBS' overall bad debt losses fall one per cent to £1.87bn. The group, which owns the NatWest bank, said that retail banking profits rose 10 per cent to £2.47bn and deposit balances rose nine per cent.

UK business banking saw an 11 per cent increase in operating profits to almost £2bn, offsetting declines in investment banking.

Chief executive Sir Fred Goodwin said prospects for 2008 were "difficult as ever to predict", but said there was good momentum behind the enlarged bank.

Aside from banking, RBS is also the UK's largest motor insurer. It said yesterday it expected premiums to rise at least as fast as the cost of paying claims in 2008.

Competitive pressures and the increasing popularity of price comparison websites have battered UK motor insurers.

RBS, which owns some of Britain's best-known insurance brands, including Direct Line, Churchill, Privilege and Green Flag, has a strong insurance presence in Yorkshire. Direct Line, Privilege and the motor business Green Flag employ 3,335 people in Leeds, Sheffield, Doncaster and Pudsey. Nearly 9,000 RBS staff live in Yorkshire.

In 2007, the RBS Insurance division posted a nine per cent drop in overall operating profit to £683m hit by £274m of losses related to floods. Excluding those losses, profits would have climbed almost 28 per cent.

Insurance Age - Motor industry insurance profits ‘unlikely in 2009’, says AA insurance

Insurance Age - Motor industry insurance profits ‘unlikely in 2009’, says AA insurance: "Motor industry insurance profits ‘unlikely in 2009’, says AA insurance

The claim by Datamonitor that the UK motor insurance industry will make a profit in 2009 is unlikely to be realised, AA Insurance believes.

Britain’s leading car insurance broker points to continuing claims inflation and premium competitiveness as key factors that will make profitability in two years’ time unlikely.

Andrew Strong, CEO of AA Insurance, said that the cost of claims is showing no sign of slowing. “The cost of damage to property and vehicles is rising by around 5% per year. On top of that we are seeing personal injury claims continuing to increase by 10% per year as accident victims are more willing to make such claims these days.”

In 2007, AA Insurance believes that the cost of claims will outstrip the cost of inflation by around 12%: in other words, for every £100 received in premiums, £112 is being paid out in claims.

“In order to reach profitability by 2009, premiums will have to rise by at least 20% over the next two years,” Mr Strong said. “Online buying means that buyers are much more likely to shop around for car insurance and buy on price. That is keeping premium rises in check.”"

The AA’s benchmark British Insurance Premium Index shows that premiums rose by an average of 5.9% during 2007 and are expected to rise by a similar amount during 2008.

Mr Strong added: “So far this year we have not seen industry premiums rise by anything like the amount that would make the industry profitable. It remains a very volatile and competitive

News | Endsleigh appoints Inbox to give brand increased online presence - NMA

News | Endsleigh appoints Inbox to give brand increased online presence - NMA: "Endsleigh appoints Inbox to give brand increased online presence"

Endsleigh appoints Inbox to give brand increased online presence

Platform: Internet | Author: Danielle Long | Source: NMA magazine | Published: 13.03.08

Email article | Printer Friendlymore News

Endsleigh, the independent insurance and financial products intermediary, has appointed digital agency Inbox to develop its brand identity and strategy for both online and offline media.

Inbox will handle strategic brand development to help the insurance company become more digitally focused. The move is part of a bid to create greater synergy between its online and offline presences, which will be led by online.

Stuart Wartalski, head of corporate communications at Endsleigh, said,...

"This is quite an interesting shift for us to use a digital agency. Previously we would have used an ad agency," he added.

"Our business has evolved and our website is now the most-viewed visual manifestation of our brand and products. It's only appropriate that the online creative strategy should translate offline."

Inbox will also create a digital strategy for Endsleigh, including data-driven eCRM campaigns.

The appointment is part of a move by the insurance brand to raise its profile in the booming insurance market, where it not only competes with brands like Churchill and Direct Line but also aggregator sites, such as Confused.com and Moneysupermarket.com.

Endsleigh aims to develop its presence among its key target markets of students, graduates and young professionals. It also aims to grow its branded insurance services, which it handles for Manchester United, Manchester City, Arsenal and Tottenham Hotspur football clubs.

Inbox, previously known as Inbox Digital, is part of the Digital Marketing Group.

DMA study finds improvement in email delivery rates - Brand Republic News - Brand Republic

DMA study finds improvement in email delivery rates - Brand Republic News - Brand Republic: "DMA study finds improvement in email delivery rates

by Alex Donohue Brand Republic 05-Mar-08, 12:30

LONDON - The Direct Marketing Association's latest email marketing benchmark report has found that delivery rates for the third quarter of last year stood at 84% for acquisition and 88% for retention.

The DMA said the results demonstrated email service providers had reached a 'better understanding' of issues surrounding deliverability that it was now addressing.

However, the report also noted a sharp decline in mailing volumes for the July to September period, which it attributed to a slowdown in business over the summer and clients changing email service providers.

According to the study, the number of email service providers not using segmentation in campaign work decreased significantly since the beginning of 2007, with only 15% now using single segmentation campaigns in comparison with 50% for quarter one in 2007.

The DMA said increased use of segmentation had grown open rates by 20% for acquisition and 30% for retention for the period.

Richard Gibson, chair of the DMA Email Marketing Council, said: "It is very encouraging to see that issues surrounding deliverability are being addressed. However, there is still room for improvement.

"Relevance and timing are vital to the success of an email marketing campaign, while clients using ESPs appear to be sending a higher number of different types of emails, there are still areas where all clients could create more relevant, timely messages for their customers."

"

Insurance Times - RBSI approves partner’s use of aggregator site

Insurance Times - RBSI approves partner’s use of aggregator site: "RBSI approves partner’s use of aggregator site

RBSI approves partner’s use of aggregator site

14 December, 2007

By Sarah Kennedy

Royal Bank of Scotland Insurance (RBSI) has for the first time given permission to one of its corporate partners to appear on an aggregator site other than TescoCompare.com.

But the move could frustrate RBSI’s other corporate partners which have not been given a similar permission.

Lloyds TSB, whose motor insurance is underwritten by RBS-owned Churchill, is understood to have been in discussions with Moneysupermarket.com since October about becoming listed on the price comparison site.

Moneysupermarket director of insurance Richard Mason said the hope was to have Lloyds TSB on its site by February.

Mason said he predicted the move to grant only Lloyds TSB the freedom to appear on the sites might cause conflict with RBSI’s other corporate partners also keen on garnering a competitive edge.

Mason said: “We’ve had chats with the others and they are keen to be on aggregator sites and we were quite surprised only Lloyds TSB was given permission.”

RBSI also underwrites insurance for companies such as Virgin Money, Privilege and Prudential. The company’s in-house brands NIG and Churchill have also not appeared on other price comparison websites.

A TSB spokesperson said: “We would never comment on speculation about plans for the future”.

RBSI, Privilege and Prudential declined to comment. Virgin Money was unavailable for comment.

Insurance Times - RBSI unveils restructuring changes

Insurance Times - RBSI unveils restructuring changes: "RBSI unveils restructuring changes

RBSI unveils restructuring changes

Issue 06-12-2007

By Sarah Kennedy

Move is said to create growth and stop its brands from competing against one another

Royal Bank of Scotland Insurance (RBSI) has launched the second phase of its restructuring plan to create more cohesion between its various, sometimes competing, brands. The move has so far resulted in the loss of two senior managers.

The restructuring was revealed on insurancetimes.co.uk on Tuesday.

Advertisement

Chief executive Chris Sullivan has been quite candid about the need for RBSI to put a stop to the competitiveness between its brands including Direct Line, NIG and Churchill and start acting more as a single company.

Last week, in a memo to senior managers, Sullivan announced that both Chris Moat, managing director of RBSI motor and chief risk officer Robin Webster, would be leaving the company.

Staff were also informed that commercial and brokers will now fall under one managing director – Andy Cornish – in order to place all commercial expertise in one area, regardless of distribution channels.

The restructuring saw a further shifting of existing managers into different departments.

An RBSI spokesperson said: “Our focus over the next 12 months is on delivering strong income and profit growth and the moves announced last week will allow us to do that.”

When Sullivan took over as chief executive in January from Annette Court, one of his first moves was to strip the various brands of their aligned bosses, opting instead for product line and distribution managers.

At the time, management was split into four distribution groups: motor, household, life/international and broker partnerships.

Moat, who was managing director of Direct Line, became managing director of motor for RBSI.

The latest changes however, see broker and commercial, partnerships and international and household and life, paired together.

For one industry analyst very familiar with RBS, the move makes perfect business sense.

The source said: “There are huge cost pressures for the whole industry at the moment and many organisations are looking at how to improve the overall efficiency of the business model. This is a perfectly sensible set of responses.”

The analyst said the restructuring was likely to be an attempt to break down the silos behind the brands rather than the rationalising of the RBSI brands.

He said that the greater cohesion would create cost savings in terms of infrastructure and call centres.

Changes could also provide more opportunities for selling products to banking customers through RBS’s UK branch network.

Another source however, with ties to RBSI, was more suspicious of Sullivan’s motives and believes the changes go beyond just cost savings and efficiency.

Following ongoing industry rumours suggesting the interest of some major insurers in purchasing NIG, the source questioned whether placing all of the brand’s commercial products in one place may make it easier for RBS to sell.

He said: “This would be a move for RBS to go direct and cut out all the intermediaries and brokers. They are launching Direct Line into commercial anyway.”

Regardless, analysts agree managing directors may have a big job in getting the brands, have at times undercut one another, to work together, particularly as one industry source suggests, the new roles don’t seem as clear cut as they were in the past.

He said: “From an outside perspective, it looks like a matrix of things. Who is responsible for what? If something falls through the cracks, who takes the rap? It will become more informative once they fill the vacant positions.”

News of the changes, particularly the loss of Moat, surprised some industry sources.

Charles Earle, Arista Insurance chief executive and former RBS employee, said: “I’m surprised to see a senior MD like Chris Moat leave the company and take all that experience with him, but no doubt he and the organisation have their reasons for that decision.”

Insurance Times - NIG sale mooted as business drops

Insurance Times - NIG sale mooted as business drops: "NIG sale mooted as business drops

Issue 06-03-2008

By Sarah Kennedy

Focus on motor risk selection fails to improve RBSI results

Royal Bank of Scotland Insurance (RBSI) chief executive Chris Sullivan has opened the door to a potential sale of the NIG brand, as the company reports a loss of business in its broker division.

Sullivan declined to say if RBSI would still own broker-only insurer NIG this time next year, adding: “As we stand now, I don’t know. We certainly haven’t sold it. I couldn’t give a guarantee about anything in the future because things move so fast.”

The company’s fourth quarter results showed profits before tax of £683m, but reported a loss of business in its broker and partnerships divisions.

Although there was income growth in motor broker business of 6% to £356m, due to average price increases, the number of policies declined by 4.5% to 1.37 million.

Sullivan said the company’s policy of focusing on profitable risk selection in motor partnerships resulted in a fall in income of 9% to £1.07bn, with policy numbers down 12%.

He said: “We have turned away business that is unprofitable and improved our risk-pricing capabilities. People have been chasing volume for volume’s sake.”

At the end of 2007,RBSI underwent a major restructuring in a bid to stop its six brands from competing against one another and instead operate as one company.

In the autumn, RBSI’s personal lines insurer Direct Line launched a commercial product and Sullivan said he would like to see that business grow as much as possible.

The restructuring has led to market speculation that Sullivan may be looking to sell off NIG and focus more heavily on direct lines of business. AIG and MMA have been mooted as potential purchasers by market sources.

The restructuring has seen several senior managers leave the company, but Sullivan said despite the uncertainty, morale has been higher than he anticipated.

He said: “They agree with the direction the company is taking.”

"

Aviva ready to jettison Norwich Union brand in UK - Brand Republic News - Brand Republic

Aviva ready to jettison Norwich Union brand in UK - Brand Republic News - Brand Republic: "Aviva ready to jettison Norwich Union brand in UK

by Ed Kemp Marketing 04-Mar-08, 08:45

LONDON - Insurance giant Aviva is preparing to phase out its Norwich Union name in the UK in line with its global brand strategy.

The removal of the Norwich Union name, in favour of the Aviva brand, will be overseen by incoming group marketing director Amanda Mackenzie, who starts in her new role this week. It is understood the RAC brand will remain untouched.

The company had previously claimed that the introduction of its Aviva brand in July 2002 would not be a precursor to dropping its other regional brand names.

Aviva replaced the CGNU identity, which had been in use since May 2000 following the merger of CGU and Norwich Union. It currently uses the Aviva name in most of the markets in which it operates, including France, Canada and the US, but in the UK, Norwich Union and RAC are its consumer brands.

The UK is not the only market in which it retains sub-brands. Other names it uses across Europe include Delta Lloyd, Commercial Union and Hibernian.

Last year, Aviva shed 140 staff from its marketing team and cut its budget from £180m to £100m (Marketing, 20 November 2007).

Mackenzie was not avail"

News | Esure makes getting a quote easier - NMA

News | Esure makes getting a quote easier - NMA: "Esure makes getting a quote easier

Platform: Internet | Author: Luan Goldie | Source: nma.co.uk | Published: 27.02.08
Email article | Printer Friendlymore News

Insurance company Esure has launched a site focused on usability and accessibility.



Its ‘Quote and buy’ feature has been reworked to make it easier for consumers to use and access, with colours, fonts and page layouts being revised.


The need for change was highlighted by usability consultancy Optimum.web, part of RedEye, which also carried out the work.



Ed Longley, ecommerce manager at Esure said, “With there being various routes for visitors to arrive at our quotation page, we saw it as imperative that the user experience, once they were there, was as straightforward as possible.”"

Pepsi draws up expansion plans for Raw brand - Brand Republic News - Brand Republic

Pepsi draws up expansion plans for Raw brand - Brand Republic News - Brand Republic: "Pepsi draws up expansion plans for Raw brand

by Jemima Bokaie Marketing 26-Feb-08, 06:30

LONDON - Pepsi has revealed it plans to expand Pepsi Raw, its nascent premium cola brand made from natural ingredients.

Bruno Gruwez, marketing director at Pepsi, confirmed that the company is developing additional flavour variants and pack formats to broaden the offering.

Meanwhile, Pepsi is preparing to launch a £1.5m integrated campaign to support Pepsi Raw's UK launch (Marketing, 21 November).

The campaign, created by Abbott Mead Vickers BBDO, breaks on 3 March. It will encompass print and outdoor advertising and is aimed at 'sophisticated and urban' consumers.

The creative is designed to convey Pepsi Raw's 'youthful and cutting-edge' brand and features half-naked figures against a New York cityscape. 'It is different from previous Pepsi ads,' said Gruwez. 'We want to create a buzz around the product.'

Pepsi Raw has been developed by PepsiCo UK. It is being rolled out in selected pubs and bars from this Friday before being introduced in stores, then launched globally."

City Republic: RBS could point the way to recovery - Brand Republic News - Brand Republic

City Republic: RBS could point the way to recovery - Brand Republic News - Brand Republic: "City Republic: RBS could point the way to recovery

City Republic: RBS could point the way to recovery

by Stephen Foster Brand Republic 25-Feb-08, 08:30

Is Royal Bank of Scotland about to 'seal' the market recovery, asks Stephen Foster. He also casts his eye over the automotive sector and reports of WPP's forthcoming results.

All eyes on Royal Bank of Scotland
Arguably the UK deal of the last decade or so was Royal Bank of Scotland's takeover of National Westminster Bank, creating a UK giant and now one of the biggest banks in the world.

The person who released the value in the deal was Fred "The Shred" Goodwin (now RBS CEO Sir Fred Goodwin) who found costs to cut that others had missed completely.

Fred has since expanded the business internationally, most notably with last year’s consortium takeover of Dutch giant ABN Amro, for a chunky £47bn.

RBS, which gazumped Barclays for ABN just as it had Bank of Scotland for Nat West, continued with its bid even while stock markets were collapsing and credit tightening thanks to the sub-prime crisis.

Some unkind commentators have remarked that it could have bought Merrill Lynch, JP Morgan and a couple of others for the same money at the tail end of last year. That is, they feel Fred overpaid.

Now there are fears that RBS will need to boost its capital ratio (the proportion of its own money to its loan book) if it has to announce big sub-prime write-offs when it announces its 2007 profits on Thursday.

But Fred didn't get where he is by blinking first.

A rights issue, the most obvious way of raising more capital, would result in a City chorus calling for Fred's head (RBS shares are already down 40% or so in a year and a rights issues would depress them further).

So RBS is far more likely to flog off a few of the big assets it has acquired over the past few years, like Angel Trains and Condor Ferries.

A few weeks ago it looked as though it might be adding Liverpool Football Club to this eclectic list, because it lent Tom Hicks and George Gillett the money to buy it. However, they've since re-financed.

But, just as football managers need to be lucky, embattled CEOs need circumstances in their favour too.

And there are signs that the markets are recovering a bit, in the UK anyway. The financial sector has brought them down but Barclays and Lloyds TSB produced decent figures last week and Alliance & Leicester, which took a biggish hit on sub-prime, didn't collapse and will probably be taken over anyway. Northern Rock is out of the way (for better or worse) and RBS, unless it's just talking a good game, could seal the recovery.

And Fred's big bet on ABN Amro won't look so daft after all.

The spread betting shops are expecting the FTSE 100 to rise back above 6,000 this week and the index duly set off north in early trading this morning.

WPP acquires UK digital agency HeathWallace - Brand Republic News - Brand Republic

WPP acquires UK digital agency HeathWallace - Brand Republic News - Brand Republic: "WPP acquires UK digital agency HeathWallace

by Staff Brand Republic 14-Feb-08, 11:20

LONDON - WPP Group has bought a majority stake in six-year-old UK digital agency HeathWallace for an undisclosed sum.

The agency, which is based in Reading with offices in Hong Kong, is ranked at 81 in the UK's top 100 digital agencies.

The acquisition of a 75% stake was made by WPP Digital, the digital investment arm of WPP.

Founded in 2001, HeathWallace has around 60 staff and includes HSBC, RBS, ABN Amro and AIB among its clients.

HeathWallace's unaudited revenues for the year to December 31 were £4.3m with gross assets of £3.1m.

It is the second acquisition that WPP has announced this week. Earlier, it acquired a stake in NuConomy, a web analytics company based in Silicon Valley and Israel.

The investment continue WPP's strategy of developing its networks in fast growing sectors and markets and strengthening its capabilities in digital media."

Can you trust comparison sites? | This is Money

Can you trust comparison sites? | This is Money: "Can you trust comparison sites?
Liz Phillips & James Coney, Daily Mail
13 February 2008

Can you trust comparison sites?

Liz Phillips & James Coney, Daily Mail
13 February 2008

Reader comments (1)

Comparision websites are supposed to make our lives easier.

The idea is these internet-based companies can examine thousands of car or home insurance policies, mortgages, loans and credit cards in an instant and find the best one for you - saving you time and money.

They have become big business. More than two out of every three car insurance policies sold last year were done through the 17 leading, and handful of smaller, comparison sites in the UK.

And you can't fail to notice them. Those shouting the loudest with big budget ad campaigns are Moneysupermarket.com, Confused.com, GoCompare, Comparethemarket, uSwitch and newcomer TescoCompare.

The biggest, Moneysupermarket, got more than 4.5m separate visitors in just one month last year, and took 55% of the market. In all, 10m people a year pay separate visits to look at its mortgages, motor insurance or home insurance.

Sites make their money by picking up commission for each customer they send to the provider or when a successful sale is made - they get around £45 for each successful credit card sale generated by the site or £3.50 per click through to the provider's site. They could pick up as much as £100 if you take out a loan.

They also get money from companies advertising on the site, and some by passing on your personal details to other salespeople.

What's the catch?

The British Insurance Brokers Association recently claimed that the sites make assumptions that have misled consumers into making the dangerous mistake of taking out insurance they will never be able to use.

And they have angered independent financial advisers who must spend thousands of pounds a year to comply with the strict sales rules of the City watchdog Financial Services Authority when they make a recommendation.

The FSA is considering bringing in similar rules for comparison websites. The main complaint is the lack of consistency. Consumers expect comparison sites to find them the cheapest deal available. But while the results you get back may save you money, a cheaper deal can often be found elsewhere.

Then there is the issue of independence. British Gas and BT have both had issues with comparison sites in the past. They complained they were unfairly represented in best buy tables because they did not have a commercial arrangement with the website. A frequent complaint will be that sites have headings such as 'Editor's Choice' or 'Best Rate You Can Get Online Today'.

These aren't necessarily the cheapest deals, but the ones that will make the comparison site the most money. However, it is not hard to see how you could be misled into thinking that these results are the cheapest. Some companies even specifically bring out products with low rates to get in to best buy tables.

The problem with this is that there will be a lot of clauses and small print adding to the cost. Another frequent complaint is from customers who don't get the price they are originally quoted on the comparison site. One reason is that this quote is not in real-time, so it is only an indication.

A second reason is that most sites only ask for a limited amount of information and then make a series of assumptions to fill out the forms. If your circumstances don't fit these assumptions then the final quote you are given from the insurer is likely to be far higher.

When it comes to savings, mortgages and credit cards best buy tables are not all they seem. With credit card and loans, most lenders give 'typical rates' which means you may get a vastly different interest rate quoted based on your track record of handling credit when you fill in an application.

Criticisms are that savings rates are artificially boosted by short-term bonuses - something Money Mail's savings tables never take into account. It something Nationwide is campaigning to have included in the Banking Code.

Mortgage tables usually disregard higher lending charges which can be levied on loans amounting to more than 90% of the price of the property. Arrangement fees based on a percentage of the loan that are uncapped can be astronomical on larger mortgages - but the provider could still be at the top of the table if it offers the cheapest rate.

What we found

Money Mail compared the sites using two typical scenarios - one for motor and one for home insurance. The difference in price can be huge. And the way the sites work differs massively, too.

Research from data compilers Defaqto found that just over one in ten of those looking for car insurance were given the same premium by the insurer as they received on the comparison site. Of the three leading comparison sites for credit cards the best buys for balance transfers and purchases differed widely.

The top three for Moneysupermarket, Confused and uSwitch were all different. Insurance is one area where the differences are most marked. We were baffled trying to understand which insurers appeared on each site.

TescoCompare has a panel of just 30 insurers. They go to for quotes in the same way as a traditional broker will do and claims Lloyds TSB, Nationwide, Churchill, Privilege, Prudential, Virgin and Tesco don't appear anywhere else. You can compare the product features of the cheapest four, but we found it refused to give the next four's details despite six attempts.

Confused.com meanwhile, says it covers 97% of car insurers compared with just 70% of home insurers and 100% of energy companies. But its site proved confusing when looking for home insurance. Because one section was filled in incorrectly we had to start again and, in all, took an hour to complete the search.

Comparethemarket's home insurance form didn't ask for the value of contents, items away from home and high value items. Its cheapest quote came out very low, but its quotes are likely to be inaccurate. With Gocompare we didn't appear to be able to increase the cover for items away from home from their automatic £750 to £2,000.

Comment | Letters: Best practice is needed to ensure email delivery - NMA

Comment | Letters: Best practice is needed to ensure email delivery - NMA: "Letters: Best practice is needed to ensure email delivery

Letters: Best practice is needed to ensure email delivery

Platform: None | Author: Mike Weston, MD EMEA, Silverpop | Source: NMA magazine | Published: 14.02.08

Email article | Printer Friendlymore Comment

The quarterly National Email Benchmarking Report is a useful tool for stirring debate but I often think the results hide more than they reveal. This quarter's report says that email delivery rates fell by 68% for customer acquisition and 80% for retention. I guess it depends who you're counting: one well-known online fashion etailer we work with is seeing a 99.5% delivery rate.

The only way to truly benchmark your current deliverability is against your past record. Averages of a moveable...

It's not as if overall volume of emails has grown - that has actually declined slightly - so perhaps, while ISPs and consumers have become more savvy about how they filter email, those sending them aren't moving at the same pace. Trends across our pool of customers continue to show that, over time, email marketers who embrace best practice tend to maintain much higher deliverability rates.

There will be blips as one or other ISP or email gatekeeper changes the rules, but these should be dealt with as they arise and, assuming best practice, the deliverability rates should return to their previous levels.

Churchill Insurance relaunches nodding dog microsite - Brand Republic News - Brand Republic

Churchill Insurance relaunches nodding dog microsite - Brand Republic News - Brand Republic: "Churchill Insurance relaunches nodding dog microsite

by Nikki Sandison Brand Republic 15-Feb-08, 09:30

LONDON - Churchill Insurance has relaunched its Challenge Churchill microsite, giving visitors the chance to play interactive games, test their Sudoku skills and enter a prize draw to win a Nintendo DS.

New games will be added to the site every month to keep it fresh and engaging for users.

Visitors will also be able to have their insurance questions answered by the Churchill nodding dog.

They can challenge Churchill for a better quote on car, home, travel, pet, breakdown, van or motorcycle insurance.

A spokesperson for Churchill Insurance said: 'We have relaunched the microsite to ensure it offers visitors a fully interactive experience.

'We hope that people will have such fun playing the quizzes and games that when it comes to getting an insurance quote, Churchill will be front of mind.'

Churchill is part of RBS Insurance and is wholly owned by the Royal Bank of Scotland Group.

Earlier this month Churchill briefed digital agency Rufus Leonard to launch a heavyweight online ad campaign promoting its range of car and home-insurance products in conjunction with its Challenge Churchill TV ads."

RBS faces tough questions over £12.5bn finances gap | Business | The Guardian

RBS faces tough questions over £12.5bn finances gap | Business | The Guardian: "RBS faces tough questions over £12.5bn finances gap"

RBS faces tough questions over £12.5bn finances gap

• Jill Treanor
• The Guardian,
• Tuesday February 5 2008

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This article appeared in the Guardian on Tuesday February 05 2008 on p22 of the Financial section. It was last updated at 00:02 on February 05 2008.

The Royal Bank of Scotland is scrambling to reassure investors that it has a robust capital base in the face of increasing speculation that it needs to plug an estimated £12.5bn gap in its finances.

The Edinburgh-based bank is facing tough questions from City analysts and investors about whether it needs to conduct a rights issue or sell off assets to raise funds. There are also concerns that it might need to write off more losses from its exposure to financial instruments linked to the sub-prime mortgage crisis.

Some investors believe that if the bank did embark upon a cash call, it would require a shake-out of the RBS board and possibly the departure of chairman Sir Tom McKillop or chief executive Sir Fred Goodwin.

The lingering suspicion that the bank will need to raise capital is putting pressure on its share price, which has slumped to below 400p but started to recover yesterday as the bank briefed investors. Analysts have calculated that to put its capital base on a par with its European rivals, RBS would need to raise £12.5bn - just under a third of its existing market capitalisation.

Last week analysts at Credit Suisse and Citi raised the possibility of a rights issue by RBS. Citi's analysis also covered Barclays which it calculated could need to raise £6bn of capital.

The analysts at Credit Suisse said: "RBS shares continue to suffer from broader concerns over write-downs and loan impairment, magnified by the very high balance sheet leverage at the bank."

They raised six options for the bank, including doing nothing or selling assets such as rolling stock company Angel Trains.

They suggested it could sell its Bank of China stake or its insurance division, which includes Direct Line, or cut its dividend. They concluded, however, that a rights issue was the preferred route - even though it conceded the bank would be reluctant to proceed with such an embarrassing move.

A year ago, RBS raised its dividend by 25% and indicated that more generous payouts were on the way for investors. However, much has changed since then. The decision to buy parts of ABN Amro has put pressure on the bank's finances while the credit crunch has also added to its difficulties.

The analysts focus on the bank's so-called tier one ratio - a regulatory measure - which they argue is at 4%, which they compare with the European average of 6.5%, and note it is at the bottom of the range acceptable to the regulator, the Financial Services Authority.

However, RBS is thought to be arguing to investors that it has a total capital position of 12%, which is well above the regulatory norm of 8% and that this is a better measure.

RBS refused to comment but pointed to its last communication with the market when it insisted its capital was "within its target ranges".

400p
The Royal Bank of Scotland's share price has slumped to below this figure, though it is starting to recover

£6bn
The amount Barclays might be expected to raise, according to Citi

25%
The percentage by which RBS raised its dividend last year