Information about NIG and FarmWeb joining RSA
Last updated: 1 May 2024
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Summary of the deal
This transformational journey enables us to develop a Commercial Lines operation in the UK that is geared to outperform in terms of service, profitability and growth.
It complements the existing distribution footprint of both companies, and provides a core platform to provide improved service and deliver better products to brokers and customers in the future.
As a result, we’ll become the third largest Commercial Lines insurer in the UK with approximately 7% market share by annual GWP, with a combined ratio in the low 90s in the medium-term.
Principles of the integration
We will integrate in the best way that ensures service continuity and protects your business during the transfer, while prioritising speed of delivery.
To achieve our program principles and to provide a good experience for you and your customers, we are using a ‘lift and shift’ approach, which means the first objective is to separate the NIG and FarmWeb broker business from Direct Line Group (DLG) and maintain products and systems as is.
Our ambition in the near-term is to bring to you the 'best of both' so we’ll be merging our products, pricing, service, and value proposition into one. More information will follow on this later in 2024.
In the coming weeks, we will announce the leadership team to take forward the combined entity, establishing clear accountability and direction as we begin integrating employees and customers during Q2 and Q3 of this year.
We are excited about the future; the opportunities it presents for our business, our customers and our colleagues, and we’re always keen to hear from you. We’ll provide regular updates on the Q&A pages of both the RSA and NIG websites, so please do let us know your questions and any concerns so we can ensure you have the answers you need.
We’re keen to create one business and one voice to brokers. We are targeting two major milestones.
On 1 May 2024 we will transfer people, premises and assets, and then begin migrating customers to RSA from mid-June onwards in a phased approach, which will complete in Q3 2025.
The priority is to manage the integration whilst maintaining business as usual levels of service.
We plan to phase the migration of customers over a number of months, depending on product, channel or tech requirements.
From around mid-June about 20% of the NIG book starts to migrate. This will be predominantly delegated schemes and some Legacy manually written products.
From 15 July 2024, e-traded business on Acturis, other software house mid-market business, the online schemes book and all policies with an effective date of 2 September 2024 start to migrate.
The CV business which is written via CDL will migrate later this year.
From a regulatory perspective, and as we assign all of the Terms of Business Agreements (TOBAs) across and deal with contracts coming over to RSA, we will be providing you with a schedule. This will clearly map out those effective dates for renewal, plus any new business and at what point they will start to be written by RSA.
There are a small amount of policies that sit outside of these timelines and will migrate at different times. We will contact you, provide a full policy listing, and help signpost exactly what the treatment is for those customers. We want to ensure there is minimal disruption to customer service as we move the business across.
We’d love our teams to be co-located and working side by side as soon as possible. Creating and embedding the culture of the new organisation is fundamental to our future success.
Both businesses have premises in similar locations, but also have premises in different locations. It’s important we review the full location strategy to ensure we do the right thing for you, our customers and our colleagues.
We will not quote on business written by NIG. New business presentations which clearly state NIG as the holding insurer will be declined, and you will receive an email confirmation of this.
Whilst we anticipate the instances of this to be rare, we have established an internal process for those cases in the Upper Mid-Market where we will manage follow-lines/cumulative capacity across RSA and NIG on single risks.
Our underwriting teams will collaborate to find the best way forward for you and your customer.
For SME/e-trade existing business held by NIG and FarmWeb, the high volume nature of this business means we will continue to quote on NIG and FarmWeb business (and vice versa) until the integration is complete.
For Delegated business, it is less likely that we will both be quoting on individual MGAs/schemes, but customers have the right to choose the wording and terms that suit their needs.
Each arrangement will be considered on its own merit. In these situations, they will be considered by the RSA leadership team for a prompt decision.
This isn't necessarily a typical straight-forward acquisition of a discrete business. We bought an asset of DLG, so much of the work that we've had to tackle in the first year has been in relation to the segregation of the business from DLG.
By early summer 2024 we'll have started migrating our business and customers over to RSA. After this, we'll start to migrate the data and systems. For claims, the process is slightly longer and will take us further into 2025 to achieve.
We don't want to be operating as two separate trading companies. We're therefore working hard on how we harmonise our combined product sets and our rating tools. We want to be in a position to offer one best-in-class product under one price underpinned by one TOBA as soon as we possibly can.
We will not compete on held business. If you submit a held risk to RSA, as a new business enquiry, we won't quote, and we'll explain that to you as and when the situation arises.
The recent purchase of NIG positions RSA Commercial Lines as a lead insurer in the Regional/Mid market space.
RSA Specialty Lines UK and RSA Specialty Lines Europe will continue to operate under our Global Specialty Lines, where we pursue our strategic roadmap in line with Intact’s Global Speciality Lines plan. This gives brokers and customers who require a Specialty solution, access to a far broader set of capabilities and expertise at RSA.
RSA Specialty Lines UK and RSA Specialty Lines Europe will continue to operate under our Global Specialty Lines, where we pursue our strategic roadmap in line with Intact’s Global Speciality Lines plan. This gives brokers and customers who require a Specialty solution, access to a far broader set of capabilities and expertise at RSA.
We recognise that, particularly in large corporate business in the Regions, the broker experience sometimes isn't where it should be. Therefore, we've appointed Steve Salter as the Regional Trading Director for large corporate business. He will pull together all the coordination aspects to create a seamless proposition service to Brokers.
We know that it currently doesn't work how we want it to work, and we certainly know it doesn't work if we want to outperform in that segment. The idea of the appointment of Steve is to improve service. We know it's business we like, we have a strong position in that upper mid-market space, and we want to continue that. We want to grow it, but equally we want to grow the small mid-market space as well.
We're also looking to improve the service proposition of the manually underwritten smaller business, and will be heavily investing in technology to support this.
The first drop of migrating packages policies is in June 2024, but you won't notice a massive difference for a month or two as that settles.
In Q3 2024, you should see an improvement in the trading performance in the packages area, and we'll then build on further product sets. Certainly by the end of 2024, that's an area of strength that we expect to emerge.
We're trying to move away from the minimum entry thresholds to mid-market new business of £10,000. We do have a small mid-market proposition offering that we are expanding in line with our wider distribution strategy.
If you have a TOBA with no corresponding RSA access, we'll be looking to correct that as quickly as we can. It won't be a blocker as we will assign all of the corresponding agreements that underpin your TOBA in advance of the business migrating, so you shouldn't have any challenges.
For the time being, nothing changes. Our BDM's, account directors and strategic account managers will all continue to look after their same panels of brokers. If you had previously gone to your RSA or NIG contact, you should continue to do so.
We anticipate that we will achieve the required levels of system segregation by mid-July 2024. This will allow NIG colleagues to access RSA company sensitive information, meaning that we can accommodate joint broker meetings.
The priority right now is on separating the asset from the DLG family and getting it smoothly across into the RSA world as soon as possible, and with minimal disruption.
We are looking hard at every single decision, plus the processes and the systems that we are employing to do exactly that. We're in a cyclical business, and with the combination of the two businesses coming together, we've got a much richer product and data set.
There will be a continual focus on the performance of our portfolios, both good and bad, to look at emerging trends. This will evolve as part of our BAU over the coming months.
To give some specific examples:
- We have a Funeral Director scheme that looks at both the motor and the non-motor risks
- We have a Charity scheme which is a package product, so Property, Liability and also some Financial Lines
- We have a scheme that targets the early years setting, so child minders and nurseries
These schemes are often packaged products but, as you can see from those 3 examples, they're all targeted at specific customer groups.
No one partner looks exactly like the others. Some partners have worked with us at the start on product development. Then, once we've built a product, they are happy to work within a set of rules that we govern. Other partners have sophisticated underwriting capability, and therefore the nature of Delegation to them is a little bit broader to make use of those skills, in order to give the customer the best service that we can.
The early year setting arrangement we have is a partnership with a recognised trade body, and it's an optional purchase alongside their membership.
Opening up schemes to multiple Brokers is not necessarily the approach that RSA has taken, but it is something that's more common with NIG.
We're keen to learn more from NIG and may be looking to open some of our schemes up more broadly going forward.
RSA doesn’t currently have a Motor Trade product, so it is very much focused on what we offer currently in the space.
Motor Trade covers everything from a small Motor Trade Repairer or Car Sales Outlet, all the way up to some of the largest Dealership Propositions we've got in the UK.
We continually look at Policy Wordings and scan the market for the best ones, then work out where we should be positioning ourselves. But we have no plans to change what we're doing in Motor Trade at the moment.
We offer a wide spectrum in terms of what we do in Motor Trade.
We offer Broker Partnership Agreements right across the agency base that we have. They take different forms, each one is bespoke to the individual broker and there are no plans to change our offering around Broker Partnership Agreements.
We haven't yet made a decision on the brands, other than we will eventually move to a single brand. This will be determined next year.
The sale of our Personal Lines direct business (More Than) involves the transfer of renewal rights for direct Home and Pet insurance, together with around 300 colleagues and relevant assets including our brands and data to Admiral.
This is unrelated to, and has no impact on, our appetite to write specialist PL products within our Delegated business as this remains a core part of our Commercial Lines strategy.
We’re very keen to widen the product range available to brokers as a result of this transaction.
For the time being, we will continue to operate separate agency management processes while we work through some system complexities as part of integration, and existing Terms of Business Agreements (TOBAs) will remain in place for RSA, NIG and FarmWeb.
FarmWeb has restricted distribution because of the specialist nature of agricultural insurance. In the short term, there are no plans to change that. We will continue to review this as we move forward with the integration.
We have identified around 350 Brokers who do not have a reciprocal RSA agency.
We will be offering all eligible Brokers an agency, and we hope to have completed the on-boarding process by September 2024. This will allow brokers to have access to the full suite of products and propositions that exist on the RSA side.
Brokers will remain on their existing commission arrangements and credit terms for 2024.
In the medium-term, as we look to create one offer (product and pricing), this will also include harmonisation of commission arrangements. We will communicate more information on this in Q3/Q4 2024.
RSA will continue to operate discretely for the time being, and any remuneration agreements will run to the agreed contractual period and terms and conditions.
Maintaining our trading momentum and providing good service is a priority throughout integration.
We will review any expiring remuneration agreements on a case-by-case basis, and will work with you to agree the best way forward in the interim to help you meet your customers needs.
We are very keen to listen to your views and requests. Please speak to and raise any questions via your usual RSA, NIG or FarmWeb account representative.
For our manually underwritten business (traditionally in Mid-Market) we are reviewing the quote process, particularly for new business.
We are looking at how AI and Data science can help us drive extra efficiency and capacity to be more responsive. We're also assessing how we ingest unstructured data more efficiently, how we triage and enrich the data to get a better view of the risk, and how we then route that to the best underwriter.
For our online trade business (predominantly SME), we will continue to look at how we further improve speed of response and accuracy. This is with the goal of maximising the number of enquiries that go straight through to quote with underwriter intervention.
We're looking to take the best bits of two extremely complimentary businesses and work out where we can redeploy them within the wider business.
Live chat is something that we employ extremely well in our online SME business at the moment. On a monthly basis, we're doing in excess of 7,000 chats and the level of satisfaction rating is excellent or very good. This is in the mid-90s.
That's the technology we've been working with for a number of years now, and it's exactly the sort of thing that we should be looking to redeploy into as many applicable areas of our business as possible.