"It's been an important quarter," says boss of bank's insurance arm
Royal Bank of Scotland Insurance chief executive Paul Geddes says the decision to strengthen bodily injury claims reserves by a further £100m is outweighed by the company's improved third quarter results.
In response to RBSI's third quarter results posted this morning, Geddes said: "Despite our decision to strengthen reserves by £100m following an industry-wide review of PPOs, our performance has improved on Q2 2010, with operating losses reduced to £33m from the £203m loss in the previous quarter.
"We are progressing well with our transformation programme. Our strategy to refine our pricing and underwriting, improve our claims operation and reduce our cost base remains on track. Underlying profitability continues to improve. Actions have been taken to tighten underwriting criteria and pricing and claims initiatives have also started to deliver benefit.
"Targeted ratings action to remove higher risk business together with our decision to refocus our NIG business as a pure commercial lines carrier, and to withdraw from broker personal lines has allowed us to take out our most unprofitable business from the overall motor book.
"As a result, policy numbers in motor declined, though we saw strong performances in our Commercial and International businesses and in our market leading home business."
Geddes added: "Work on the implementation of our site rationalisation has begun, which will further drive down expenses. This will deliver a more robust, cost-competitive platform for the business. We also restructured our claims department to ensure a better service for our customers.
"We continued to attract talent to the business in the quarter, recruiting Angela Morrison as Chief Information Officer and John Reizenstein as Finance Director (subject to FSA approval).
"We’re a strongly positioned insurer in the UK, with a portfolio of successful and enviable brands. It’s been an important quarter and the progress we have made is testimony to the hard work and skills of our people."
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