RBS 2009 Annual Report Download - page 38

RBS Group Annual Report and Accounts 200936
RBS Insurance
Paul Geddes
Chief Executive,
RBS Insurance
MFor biographies
see pages 8-11
This is the largest personal lines insurer in the
UK. Brands like Direct Line, Churchill and Green
Flag are household names. They have helped us
become the UK’s largest motor insurer and the
number two household insurer. Market leading
positions like that don’t happen by accident.
We’ve earned them because we focus on what
our customers need.
As part of the settlement we reached with
the European Commission, we will sell RBS
Insurance during the next four years. We hadn’t
wanted to do that. It is an excellent business. We
saw it as an important part of the Group’s future.
While it remains part of RBS, we will manage
RBS Insurance with the same care and attention
as if we were keeping it. That’s the right thing to
do for our customers and if we serve them well
we will maximise the price we get when we sell
the business.
Despite the significant impact of bodily injury claims to RBS Insurance’s
2009 results, its underlying performance remained strong. Own brand
motor policies increased by 8% on 2008, while non-motor own brand
policies were up 13% on 2008.
As the floods loomed in Cumbria, we sent text messages to 29,000
customers who live in areas that the Met Office had said were at high
risk of severe weather, with tips and advice on how to protect their
homes from flooding. After the floods, we tried to give our customers
support when they needed it most. A dedicated team of advisers was
on the ground helping customers to cope with their losses and assisting
them to make claims.
Target Return on equity Cost: income less claims %
2011 >15 <70
2013 >20 <60
RBS Insurance sells and underwrites retail
and SME insurance over the telephone and
internet, as well as through brokers and
partnerships. Its brands include Direct Line,
Churchill and Privilege, which sell general
insurance products direct to the customer,
as well as Green Flag and NIG. Through its
international division, RBS Insurance sells
general insurance, mainly motor, in Germany
and Italy. The Intermediary and Broker division
sells general insurance products through
independent brokers.
2009 2008
£m £m
Insurance net premium income 4,354 4,306
Total income 4,460 4,430
Expenses (759) (772)
Net claims (3,635) (3,032)
Operating profit before impairment losses 66 626
Impairment losses (8) (42)
Operating profit 58 584
Return on equity 1.6% 18.3%
Cost:income ratio 17.0% 17.4%
Adjusted cost:income ratio 92.0% 55.2%