RSA Canada launches constructor, contractor surety

RSA Canada plans to double its actuarial staff, expand its broker financing and expand its surety offerings across Canada, company officials recently reported.

“We conducted a soft launch of surety in March 2014 out of Vancouver and Toronto and are expanding into Montreal in 2015 to provide cross Canada coverage,” an RSA Canada spokesperson wrote in an e-mail to Canadian Underwriter Tuesday. “We are currently dealing in constructor/contractor surety and may expand into commercial surety. We have some bold targets and we’re looking forward to the coming months as we continue to build out our team and capability.”

The launch of surety in 2014 has “taken off quite well,” said Martin Thompson, RSA Canada’s senior vice president for commercial insurance and global specialty lines, during a March 6 event for brokers in Toronto’s distillery district.

Speaking along with Thompson were Rowan Saunders, RSA Canada’s president and chief executive officer, and Donna Ince, the firm’s senior vice president for personal lines.

At the event, Saunders told brokers and reporters that one “material event” in 2014, for RSA Canada, was the mandatory 15% industry-wide reduction, in Ontario, of the average private passenger auto insurance premium.

“The other very material event for us in 2014 was the sale of Noraxis,” a brokerage that was sold to Arthur J. Gallagher & Co.

“The good news is that $500 million from the disposal is now going to be used as a source of funds in terms of investing in the core business,” Saunders said.

Saunders and his colleagues also discussed the importance of pricing sophistication.

“There is huge trend towards advanced analytics,” Saunders said, adding RSA Canada plans to invest about $300 million in its computer systems. There is “a bit of an arms race” among carriers “in terms of pricing sophistication capability,” Saunders suggested.

“We have about 50 actuaries,” Saunders noted. “We think that ….we effectively need to double that in the next few years, which is a big task.”

Another key initiative for the company is broker financing, Ince noted.

“We will be expanding this in 2015,” she said March 6. “We are committed to helping our broker partners grow their business. We do this through access to a team of very good professionals who have been in the business for a very long time in the mergers and acquisitions area. They are experts on acquisitions and funding. they have a lot of experience. They have funded over 100 loans over the last 20 years.”

Ince told brokers that RSA plans to launch an auto insurance product using telematics technology, which lets users monitor driving behaviour such as speed, distance, sudden acceleration and hard braking.

Although a subsidiary of the Insurance Brokers Association of Ontario (IBAO)- Independent Broker Resources Inc. (IBRI) – is planning to partner with Aviva to offer telematics to consumers through IBAO members, RSA is not partnering with IBRI.

“We looked at the opportunity but at this point we have decided to pursue our own offering in the marketplace,” a company spokesperson wrote Tuesday in an e-mail to Canadian Underwriter.

Aviva Canada and IBAO said last October that Aviva had committed to writing auto using telematics provided by technology vendor Quindell plc in partnership with IBRI. One IBRI partner that has rolled out telematics – for its commercial customers – is Unica Insurance Inc.

Meanwhile, Aviva Canada’s Pilot unit is underwriting insurance provided by Ingenie Canada Inc., which is owned by Quindell.