RBS to Retain RBS Insurance
The Royal Bank of Scotland Group plc ('RBS') - RBS to retain RBS Insurance
5 February 2009
RBS today announces that it has decided to retain its RBS Insurance division and that it is no longer in discussions with interested parties regarding a possible disposal of the business.
As announced on 4 November 2008, RBS is undertaking a strategic review with the aim of refocusing the Group on those businesses that have a clear competitive advantage, credible future growth opportunities from strong customer franchises and which generate appropriate risk-adjusted returns. After careful consideration, the Board of RBS believes RBS Insurance meets these criteria and that it is in the best interests of shareholders for the Group to retain the business.
Stephen Hester, Group Chief Executive, said: 'Given RBS' broader considerations, it was important to test the market for this business which has demonstrated that a sale on terms currently available would destroy value for RBS' shareholders. RBS Insurance benefits from a leading market position, strong cash generation and low capital requirements. It does not absorb funding or risk-weighted assets and is not closely connected to the credit cycle. It is an impressive, well-run business with great people and excellent customer franchises. It can play an important role as we return the RBS Group to standalone strength.'
For analyst enquiries:
Richard O'Connor Head of Investor Relations +44(0) 207672 1758
For media enquiries:
Andrew McLaughlin Group Director, Communications +44(0) 131 6263869
+44(0) 7786111689
Neil Moorhouse Head of Group Media Centre +44(0) 131 523 4414
+44(0) 7786 690029
NOTE TO EDITORS
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RBS Insurance is the UK's second largest insurance provider, selling and underwriting retail and SME insurance over the telephone and internet, as well as through brokers and partnerships
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It operates leading brands such as Direct Line, Churchill, Privilege, Green Flag and NIG
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RBS Insurance is the UK's largest motor insurer and second largest home and pet insurer; it is also the third largest travel insurer
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RBS Insurance is the #1 personal lines general insurer and the #2 general insurer in the UK with more than 22.5 million policies
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RBS Insurance has 2.5 million motor policies internationally and holds prominent positions in the direct markets of Italy (#1), Spain (#2) and Germany (#3)
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The division leverages volume scale with a single operating model, leading the market in cost of operations. The UK combined operating ratio for first half 2008, including manufacturing costs but excluding floods, improved from 95.8% to 94.6%
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RBS Insurance employs approximately 17,000 employees in five countries, including over 15,000 in the UK
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In the first half of 2008, RBS Insurance reported a 41% increase in operating profit (before manufacturing cost) to £513m. The business has its operating challenges but is expected to exhibit more stability than our banking businesses during the current negative credit cycle.
This information is provided by RNS
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