Paul Donaldson

“I’m a very boring kind of guy,” insists Paul Donaldson, managing director of RSA’s commercial arm, in his distinctive Irish tones.

But he says it with a twinkle in his eye. Laid back, sociable, known for being fond of a joke and a good night out, he is one of UK general insurance’s biggest and most likeable characters.

Perhaps he means RSA is boring – if so, he may have a point. It has been keeping quiet while rivals such as Norwich Union and AXA have been stomping around the market shouting about commissions and rates. But RSA has also been busy, last week announcing 1,200 job cuts, many of which fall into Donaldson’s division, as well as a robust set of results that show its cautious attitude is paying off.

The job cuts come despite a strong performance in 2008. Net written premium rose 11% to £6.5bn last year, while pre-tax profit increased 13% to £759m. RSA’s combined operating ratio has improved to 94.5%, from 94.9% in 2007. Personal lines premiums were up 2% to £1.1bn. Premiums in commercial lines were in line with last year at £1.6bn. Investment results were also healthy, given the economic climate.

The senior management was overhauled when Adrian Brown succeeded Bridget McIntyre as chief executive last September. Donaldson was handed a new job title and expanded brief, including responsibility for Motability, which insures disabled drivers. To be fair, Brown and Donaldson made a point of talking about the changes at the time – but that was a noticeable deviation from the insurer’s usual dignified, even lofty, silence.

Given that it has plenty to talk about, why does RSA tend to be so quiet? “Empty vessels make lots of noise,” mutters Donaldson in a none-too-veiled reference to his peers. “We just get on with what we’re good at.”

Although he denies it, you sense Donaldson may be a little frustrated by other insurers’ claims to be leading the market on driving commissions down and rates up. In a claim broadly supported by brokers, he insists RSA went through this process 18 months ago – as well as reviewing its managing general agency arrangements, as other insurers are doing now.

“We’ve refreshed our relationships with the consolidators and we believe we’re aligned in terms of the opportunities going forward. All the deals we do have to make us money, and we will continue to adopt that philosophy,” he says. And he can’t resist adding: “Again, it’s boring but it’s true.” It’s strange, this insistence on being boring – perhaps it’s a defensive manoeuvre. More likely, Donaldson just thinks it’s funny.

RSA has had its moments, however. There was a spat last year with Towergate over its capacity provision for underwriting agency, Fusion, but that has been sorted. Donaldson now manages all the insurer’s relationships with the arch-consolidator and insists they’re pals again.

What does he make of his rivals trying to get closer to independent brokers – for example, Norwich Union through its Club 110? Not much, it seems.

“I believe in consistent approaches to the market,” he says. “The idea of a club indicates exclusivity and the sense that members need to pay an entry fee. That prevents some professional brokers with potential from joining, so we have a more open policy.”

Donaldson is also careful to point out that the overlap between RSA and, say, Norwich Union is limited, with RSA writing a broader range of risks and coming up against the specialists as well as the composites.

If RSA reviewed its key relationships and commission structures 18 months ago, what’s it up to now? Donaldson slips into corporate speak. “We are delivering the RSA franchise that we’ve established,” he says, referring to the rebrand from Royal & SunAlliance, unveiled at last year’s Biba conference. Norwich Union isn’t the only rebrand in town and Donaldson gloats that, unlike Aviva and AXA, “we’re not a palindrome, we’re an insurance company.”

Back to the corporate objectives. “In our UK heartland of SME and mid-market, we are determined to improve our footprint, particularly now the pricing horizon is better than it has been for some time. We see it as a good opportunity.”

On a less happy note, there are those job cuts. He is reluctant to talk about them in detail because “it’s a people thing we’re going through at the moment, and we’ve got to do it properly”. But he insists the company has been careful to move as quickly as possible to limit any uncertainty. Will there be any further redundancies? “It’s not in our plans.”

So what’s he like to work for? “Direct but approachable, fair, funny, fantastic looking, young, fit and in particular teetotal,” he grins.

On a more serious note: “I like to get focused on solutions and act with pace to deliver them rather than hang about too much.”

It is no surprise when he adds: “I also believe there is a place for appropriate humour. Some of the things we do are very serious … my antidote to that is the humour.”

It works, because peers, colleagues and brokers all speak highly of Donaldson. He is perhaps restricted by the mores of the business world, but is anything but stuffy and corporate in a social setting. At last year’s Biba conference in Glasgow, following a jittery speech from Bridget McIntyre at an RSA-hosted dinner, it was left to Donaldson to address the audience of brokers and journalists. He kept hold of his glass of red wine but a scrap of paper with notes was soon discarded. Donaldson brought the house down with gags and jibes about specific brokers and colleagues. It wasn’t nasty; he just has a common touch and an ability to bring people together and make them feel relaxed in his company.

Say what you like about RSA, but Donaldson himself is far from boring.