RSA Insurance Group PLC is pursuing a transformation of its Canadian business as global chief executive Stephen Hester looks to put a painful multiyear turnaround effort in the past.
After overhauling its beleaguered business, the London-based insurance company is mapping out plans to compete more fiercely for customers. RSA posted a surge in 2016 profits and improved underwriting results on Thursday that boosted the stock, and the company said it would direct attention to how it can grow consistently amid "tough" market conditions.
"Now, obviously, you only financially outperform if you create a great business," Mr. Hester said in an interview. The keys to that will be improving customer service and underwriting, as well as further reigning in costs, he said.
RSA said in its annual results that its Canadian transformation program to make the business more resilient "progressed well during the year, delivering customer retention actions, deployment of new pricing tools, process simplification" among other initiatives. It has begun rolling out new digital tools to brokers and is working on faster response times for claims.
In Canada, RSA's renewed push to connect with clients and use more data to fine-tune pricing comes at a moment when the property and casualty (P&C) insurance market is changing, with new technologies surfacing, companies merging and different ways to sell policies through brokers and directly to customers.
RSA has been in Canada for more than 180 years and offers a broad range of commercial and personal insurance policies such as home, auto, and travel insurance. It is the fifth-largest P&C insurance company by premiums, with a market share of about 5.6 per cent, according to the Insurance Bureau of Canada's tally.
Mr. Hester has been leading the insurer's restructuring effort after a 2013 accounting scandal at its Irish business caused financial distress.
The changes included the sale of several businesses and an exit from markets such as Latin America, Russia and Italy, totalling £1.2-billion ($1.97-billion Canadian) in proceeds. Years ago, it appeared that the Canadian operations of RSA might also be on the block, especially as massive flooding and ice storms depressed profits in 2013. But RSA settled for selling a stake in a network of insurance brokers and keeping its deep roots in the Canadian market.
Since then, operating in the country has continued to pose challenges. "Canada is one of the trickiest environments in the word in terms of the variety of [natural catastrophes]," Mr. Hester said. But he added that Canada's sizable economy, orderly political process and developed insurance market were all positive factors for RSA.
Other Canadian insurers are eyeing the possibility of adding scale through mergers and acquisitions. But Martin Thompson, who took over as Canadian head of RSA in October last year, said deals are not top of mind for RSA. "I don't believe that in every case being the biggest necessarily makes you the best," he said.