RSA Insurance prides itself in being predictable, profitable and about as conservative as a group from the Women's Institute eating cucumber sandwiches in a leafy suburb somewhere in Surrey.
Under the stewardship of its former chief executive, Andy Haste, the company recovered from a near-death experience in the years shortly after the millennium to become one of Britain's most respected financial institutions. Dividends and profits both seemed to go only one way and even the onset of the financial crisis didn't seem to check its progress.
But in recent months the mood of investors has darkened following a controversial dividend cut at the beginning of the year. RSA blamed falling investment returns for the move at its AGM in London last week although shareholders called for the company to take a punt on riskier assets such as equities.
Even Standard Life waded into the row, revealing in front of a packed audience in the City at its annual meeting that it was "surprised and disappointed" by the cut. "Excessive prudence was brought to bear," said Guy Jubb, head of corporate governance at Standard Life.
This unexpected public outburst by a fellow insurer summed up a period in which the industry has found itself under the spotlight for many of the wrong reasons. RSA is by no means an isolated case. Aviva's shareholders have demanded urgent action to improve both its profits and share price, while Prudential continues to be haunted by its botched $35.5bn (£23.6bn) takeover of AIA back in 2010.
These attacks have led to some investors to question the amount of pay being paid to executives across the sector. With pay amongst the highest in the business world, are insurers the new fat cats?
One leading institutional investor said: "If you look at the performance of the insurance industry over the past few years it has been good. We shouldn't be surprised to see that companies are paying well.
"However, shareholders need to pay closer attention to what long-term incentives pay out in good circumstances. I don't think people always appreciate what they are signing up to and this should become clearer next year when companies begin setting out both target long-term incentives and the maximum incentives available."
For others though, the backlash against insurers does not mean they are about to replace the banking industry as the whipping boys of the financial services sector. George Dallas, head of corporate governance at F&C Asset Management, said: "The controversy in financial services is more about banks and we feel that sector needs more focus, particularly given lingering effects of the financial crisis and more recent reputational issues that have come to light relating to product mis-selling and other compliance failures. We have had fewer concerns with the insurance sector."
Insurers will be left to reflect on a stormy few weeks, but what seems clear is that any company seen to be stepping out of line will feel the wrath of investors.Reuse content