Top insurance boss says technology will decrease the need for skilled jobs the world over
The boss of insurance giant RSA refused to rule out replacing jobs with technology in a trend that he expects companies across the globe to harness.
Stephen Hester explained this morning that getting computers to do more work was a key way of cutting costs out of business. He said:
I would say that the way of the world is to have more productive, higher skilled people and less of them. And that’s what technology allows you to do.
It gives your people the tools so that the drudge-work goes away and it is done by computers. The higher skilled work is done by people but aided by technology, which can allow them to reach more sophisticated and insightful conclusions.
I expect pretty much all companies to be more productive through harnessing technology.
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The RSA chief exec, who is arguably best known for taking over the reigns of RBS from Fred Goodwin 2008, said that cutting costs at RSA was one central pillar of turning the business round.
"We are trying to move from a company that three years ago was at the bottom of the pack, by the end of the year last year had got to the middle of the pack and we want to move to the front of the pack relative to other insurers," he said.
RSA's share price progression during 2016
RSA stressed that its business is international, employing around 14,000 people, with 70 per cent of its operations running outside of the UK. This had enabled the group to benefit from the weakening of the pound during 2016, by posting nine month results that had benefited from a Brexit "tailwind".
Read more: Hester’s role at risk as offer for RSA looks likely
Another area of that Hester was keen to nip in the bud was the company's large UK legacy liabilities.
"What we call our UK legacy liabilities is overwhelming asbestos claims going back 40-50 years," he said.
"We have roughly £1bn of those on our balance sheet as a gross value and we are exploring how we can reinsure or sell those claims in a way that releases capital for our shareholders," said Hester.
He went on to explain that while releasing the liabilities would incur a loss in accounting terms, it would enable the business to pay down debt. Ultimately, Hester said, this would free up more cash to pay out as dividends to shareholders in the long-run.