Neville Howe joined Royal & SunAlliance (RSA) as it was going through its biggest management shake-up to date – when Bridget McIntyre replaced Duncan Boyle as chief executive with a brief to modernise the insurer, which had been experiencing rough times.
Howe relished the challenge of bringing the legal department in line with the new and improved 21st century insurer. And two years on he says the department is in robust health.
“RSA was going through a lot of changes,” he recalls. “Andy Haste [group chief executive] had an appetite for change and Bridget had started at the same time as me. The first thing we did was get the management team together for awaydays to look at the strategy for the company and where we were going.”
Having sorted out its internal issues with legacy claims from the US and sold off its beleaguered life insurance arm, the insurer set about improving its image. It is this approach that Howe uses to run his legal team – “a clear strategy centred on the customer”.
Howe adds that this philosophy has revolutionised in-house legal departments. “If you look at industry, you would traditionally have in-house lawyers working separately as a private practice, with people phoning up with queries. Today the standard of in-house lawyers is higher than it ever was. You can see that when Eversheds starts recruiting in-house lawyers back into private practice.”
Howe says his sole aim when he joined the department was “to build up a team which supports our customer strategy”. He split the legal team into three core areas: broker, to reflect the wholesale insurer; retail, to reflect RSA’s direct insurance arm MoreThan; and affinity, which represents the white-labelled insurance deals the company strikes with brands such as Toyota and Land Rover.
The broker team is home to four in-house lawyers reporting to legal counsel for brokers Charlotte Taggart. Legal counsel for retail and supply Simon Logan runs the MoreThan and operations team from RSA’s head office in Horsham, and legal counsel for affinity Sarah Gray has two lawyers supporting her in the affinity department.
In addition to these, Howe says there are two key roles – legal affairs officer and litigation and legacy officer. In July 2007, he appointed Christina Spark to the newly created position of legal affairs officer to help the insurer cope with the raft of legislative change coming its way over the next decade.
Insurance contract law is about to be reformed and Spark is lobbying on a UK and European level on behalf of the insurer. “It is an interesting position and shows that we are taking a different approach,” says Howe. “It is about saying ‘let’s not react to legislation, let’s help shape it.’ “Spark is also considering the impact of the Legal Services Act. Howe believes the act will change the nature of personal injury firms across England and Wales, which will in turn have major implications for the claims department.
Litigation and legacy officer Steve Kirby deals with claims against the company going back years. This is an extremely complex area, particularly with the bulk of legacy claims coming from the US – a jurisdiction which the insurer has moved away from in recent years.
Howe says the company rarely gets involved with key litigation test cases, unlike its competitors Zurich and Norwich Union, which tend to lead the way. It is, however, extremely interested in the outcome of the Buncefield litigation test case which will be heard in October.
Around 4,000 claims have been issued from businesses and individuals affected by the oil depot explosion in December 2005. The test case, Colour Quest v Total Downstream & Ors, should clarify who is liable for the explosion. Insurers across the board are awaiting the outcome as it will determine to what extent they are liable for the £1bn worth of claims made.
Having built up the team to full capacity, Howe says this year he aims to remove the final barriers between the legal department and the customer. “If the legal team gets the customer strategy it’s a clear sign there is change at the company,” he says. “How do you get lawyers into the bloodstream of the business? They must be thinking more broadly.”
One method is to send lawyers on secondment to other parts of the business. One lawyer has already spent a few months in the underwriting department. “Compared with the accounting sector we have been poor in helping in-house lawyers to develop upwards,” says Howe, who is determined to change this.
“I am keen on people who want to develop an understanding of the different roles they can have and help people to develop as legal managers,” he adds. “But you can’t develop people if they know they can only go so far.”
It is a philosophy he extends to the insurer’s panel firms, which must show closeness to the customer in order to be awarded a place. “There is no point us being in the bloodstream of the business if the firms we are working with aren’t with us,” Howe points out.
Sitting in his spacious office, surrounded by his children’s drawings, Howe radiates a sense of satisfaction. In a leap of faith, he gave up a job which he enjoyed in Luxembourg to join RSA and accommodate the needs of his growing family. It is a gamble that has paid off. RSA is now more profitable than ever and the future is bright.
He smiles and says: “I feel really good with where we are. We have changed how the team is structured and I have my key lawyers in place. More generally, the quality of people working in-house is so much better. It’s not just about being a lawyer – it’s about being a businessman and a lawyer.”
Name: Neville Howe
Company: Royal & SunAlliance
Position: UK general counsel
Reporting to: Chief executive Bridget McIntyre
Annual legal spend: £3.5m
Global legal capability: 12
Main law firms: Addleshaw Goddard, Eversheds, Pinsent Masons
Neville Howe’s CV
Education: Newcastle University, BA (Hons) Law
Employment: 1980-90: British Army officer
1992-98: Head of legal, Abbey Life Assurance
1998-2001: Legal director of the J Rothschild (European Group)
2001-05: General counsel of Aegon (International Group), Luxembourg
2005-present: UK general counsel, Royal & SunAlliance