While the U.K.’s Royal & SunAlliance moved out of the red in 2004 (See IJ Web site March 10), the company is still committed to further reforms of its U.S. operations, R&SA-USA.
It has already significantly restructured its operations in the U.S, selling off a number of subsidiaries, but it’s still looking for a buyer for its U.S. non-standard auto unit. Commenting on the results CEO Andy Haste noted: “Moving forward, we will continue to transition the business as well as focusing on structural change, with further simplification of the regulatory structure and the proposed sale of non standard auto.”
He went on to state: “Significant progress has been made in stabilising the U.S. business. Actions include completing the transition of the book, reducing open claims by 40 percent, reducing headcount by 68 percent, and taking $273 million out of expenses in 2004.
“Our overall exposure to the U.S. business is reducing, but risk has not been removed in its entirety. This restructuring, along with the hurricanes and the reserve strengthening previously announced, is reflected in the operating loss of £274 million [$527 million]. Having delivered greater stability to the U.S. operation we can now focus on structural changes, cutting the number of lead regulatory states, reducing the number of insurance entities and the proposed sale of non standard auto.”
R&SA is reportedly committed to making a deal this year to unload its last major U.S. operation. The company will concentrate its efforts on its U.K., Canadian and Scandinavian operations, as well as new market opportunities in Asia.