Royal & Sun to invest in Canadian operations, says CEO

In releasing its first-half 2001 results, U.K.-based Royal & SunAlliance (RSA) says the release of capital from its life operations will be fed into growing its property and casualty business in several countries, including Canada. RSA CEO Bob Mendelsohn says the company is reorganizing its business to focus on its p&c side, believing that this is where the growth opportunity exists.
Mendelsohn notes that this reorganization includes the recent sale of RSA’s life operations in Canada, as well as those in Spain, and of Lloyd Italico in Italy. “As we disclosed earlier this year, work has been underway to identify ways of releasing capital from our life business, with the intention of reinvesting it in the growth opportunities that we believe will exist in general insurance for some years to come.”
He predicts further moves to free up capital through the sale of life operations, as well as other options such as reinsurance and securitization, later in 2001. These moves, he says, are intended to bolster operations in “core” countries including Canada, Scandinavia, Australia and New Zealand. Just recently, Royal & SunAlliance Canada purchased Kemper’s p&c business, a move Mendelsohn says will add about US$55 million in annual premiums to the company. But Mendelsohn adds that future growth will be largely organic, rather than through acquisition.
The comments were made as part of RSA’s first half 2001 results, which show a 17% rise in operating profits, to US$532 million, as compared with the same period last year. The company’s combined ratio for all operations improved as well, coming in at 104.3% for the first six months of the year.