RSA ends its century-long partnership with Halifax.

(From Insurance Day)

Byline: Jon Guy

ROYAL & SunAlliance (RSA) is to end a 100-year association with Halifax Building Society after the announcement that it is to scrap its household insurance partnership agreement with parent group HBOS.

The agreement, which is worth GBP400m ($640m) of premium income for RSA, will be terminated with effect from December 31, 2003. The insurer said the decision would enable it to release GBP160m of capital into the group for 2004.

RSA said the decision is another step in its efforts to reshape the group and strengthen its capital position. Both parties said the decision has been reached "following mutual agreement that the two companies' business objectives in the household arena are diverging".

The insurer said its "strategy is to remain a strong player in selected UK intermediated personal lines, building mutually profitable relationships with partners whose strategy and customer philosophy support its business model, which is to add value by taking full responsibility for underwriting and claims handling".

HBOS, on the other hand, has under the agreement managed all policy administration and, uniquely among RSA's major clients, most of the claims-handling of its household insurance book. It now plans to extend this further ...