RBS record loss has no impact on insurance arm, says Sullivan

Chris Sullivan, chief executive of Royal Bank of Scotland Insurance, has denied that the record loss suffered by its parent company will damage the insurer.

“In terms of our strategy going forward, it has no impact,” he said.

“We are an independently regulated business, we don’t operate in the banking environment. We have talked through our strategies with our shareholders and they obviously like the fact that we’ve delivered on promises over the last couple of years and there is a track record of succeeding.”

Royal Bank of Scotland posted the biggest annual loss in UK corporate history last week.

The bank, which received £20bn from the government last year, reported a pre-tax loss of £40.7bn for 2008.

It has been forced to place £240bn of assets in a government scheme that will offer insurance against further losses.

After issuing the results, the bank confirmed that it had called off the sale of its insurance division, which it has now pledged to keep.

Stephen Hester, the bank’s chief executive, said: “We plan to retain each of our major business divisions since we believe, with intensive restructuring, they can meet the attractive business characteristics outlined as targets.”

Sullivan added that Royal Bank of Scotland Insurance (RBSI) would not try to sell NIG, its broker-only insurer.

“I’ve said all along I had no intention of selling NIG. It’s a good business and it’s performed better this year,” he said.

RBSI’s pre-tax profit rose 15% to £780m in 2008.

Sullivan attributed the increase to the placing of some RBSI brands on aggregator sites: “Launching Churchill and Privilege on Gocompare.com and Confused.com have provided good access to the aggregator channel, significantly contributing to the growth of our brands.”