The lonely path

With the release of the company's first quarter results detailing rate increases across personal and commercial lines, including motor and property, Paul Donaldson maintains that RSA is different from its competitors.

"We've been on a lonely path for a long time," he says. "We've had sixteen months of it."

On the rest of the market increasing rates, he is sanguine in his assessment. "There are no real signs out there that I can see. But I don't care what the rest of the market does - I only care about Royal & Sun Alliance."

Despite its stagnant share price, and the impact of the credit crunch, Donaldson insists that RSA stock will prove a healthy option for investors. He points to the promising performance of its Trading Units as a key indicator that the business is moving in the right direction.

He also echoes his organisation's pledge to protect the interest of smaller broker, while playing down the impact that the consolidators are having on the distribution landscape.

"You have to accept that consolidation is part of the market," he says.
"If the distribution pendulum is swinging in one direction toward the consolidators, there are some who are not consolidating as well.

"Some of the best targets may have been sold. But some of the best brokers remain independent."

He admits that RSA's model is under a state of constant review in order to adapt to changes in distribution.

"We have to develop strategies to deal with each distribution channel as they emerge. It's something we're constantly reviewing in order to retain a strong presence in the broker market."

Whatever may happen, he is emphatic on one point: the survival of the fittest.

"There's plenty of growth available," he concludes.
"Providing you're doing things expertly. That's where RSA is going."