RSA Insurance Group Plc said Chief Executive Officer Andy Haste will step down, a year after the failure of his attempt to create Britain’s biggest non-life insurer with a 5 billion-pound ($8 billion) takeover.
Haste, 49, will be replaced at the end of this year by international head Simon Lee, 50, the London-based insurer said today in a statement. RSA didn’t give a reason for Haste’s exit.
Since taking over in 2003, Haste has cut jobs, sold units and focused on writing fewer policies to revive profit after the insurer logged five consecutive years of losses between 2000 and 2005 due to surging asbestos claims in the U.S. After making more than 40 acquisitions, Haste last year tried to buy Aviva Plc’s U.K. non-life unit, an offer the target rejected.
“He’s turned around the business and left it in terrific shape,” said Eamonn Flanagan, a Liverpool-based analyst at Shore Capital Plc with a “buy” rating on the stock. “But he wanted to punch much bigger. He’s a very ambitious guy.”
Haste said the Aviva tie-up would allow RSA to cut costs and achieve capital gains. After Aviva CEO Andrew Moss rejected the offer, RSA, which would have funded the purchase with a rights offering, didn’t make another bid. Haste also considered making a $1 billion bid for American International Group Inc.’s non-life division in Latin America in 2009, according to the Sunday Telegraph. No formal offer was ever made public.
“I’ve had eight-and-a-half great years here and it’s been a real privilege to lead the team here,” Haste said on a call with reporters today. “Genuinely, I have no set plans at the moment. I’ll take my time to think about what to do next. I’m still young, still energetic, still passionate about business.”
Haste declined to comment on any future career plans, saying he wouldn’t rule anything out.
“Andy Haste could run any financial services company in Europe,” Flanagan said. “He’s a great company doctor.”
Lee joined RSA as head of its international unit eight years ago, and has since expanded the division to be the insurer’s biggest unit by revenue after making acquisitions in Ireland and Scandinavia. Before RSA, Lee spent 17 years at NatWest, part of Royal Bank of Scotland Group Plc.
Lee’s salary will be raised to 800,000 pounds following his promotion, RSA said in the statement. His bonus and other compensation will remain unchanged.
RSA’s pretax profit rose 25 percent to 376 million pounds in the six months to June 30, the insurer said in a separate statement. That beat the 322-million-pound median estimate of nine analysts surveyed by Bloomberg.
The stock sank 5.3 percent to 118.1 pence in London, the lowest in more than a year, giving the firm a market value of about 4.2 billion pounds.