Brutal is how Insurance Times describes RBSI’s recent round of job cuts. But it’s all about getting the business ready for sale or flotation in 2013, the paper claims.

Bodily injury is what sunk RNLI last year, when the firm’s net income dropped from £584m to £54m – with £449m set aside as reserves for bodily injury claims. Then in Q1 2010 the state-owned insurer’s income turned negative.

All is not lost, however. RBSI has a cunning plan. In addition to culling headcount, this includes getting serious about fraud control and putting up rates for business likely to result in bodily injury claims.

Another plan strand is ‘cutting out’ aggregators and leveraging brand name to go direct to the customer. Insurance Times appears to doubt whether the savings realised by doing this and ditching staff will really allow RNLI to cut costs sufficiently to out-compete the market and fund the advertising costs involved in direct customer acquisition.

But the paper applauds the cull and suggests “a low-cost operating high growth company, with a strong control on its claims expenses, is an attractive proposition for investor investors looking to buy up shares in the business by the time it divests in 2013.”

And that, Insurance Times argues – in direct contradiction of the established identification of the Hokey Cokey in this role – is what it is all about.


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