Insurer RSA suspends executives of Irish unit after audit

RSA Insurance has said it has suspended the chief executive and two other senior managers of its Irish business while it investigates issues in the unit’s claims and finance functions identified during a routine internal audit.

The insurer said chief executive Philip Smith, chief financial officer Rory O'Connor and claims director Peter Burke had been suspended.

When asked for a response from the RSA Insurance Ireland executives, an RSA spokesman said they were not available to comment.

The company said no findings had been made against any individuals at this time, but as a result of these issues it estimated the group’s 2013 operating result would be £70 million (€83.9 million) lower than current market expectations.

The company said it had informed the Central Bank of the issues and was working closely with it.

It also said it injected capital into RSA Insurance Ireland today to ensure its solvency ratio was comfortably in excess of 200 per cent - the benchmark ratio set by the Central Bank.

No policyholders had been affected and all its Irish businesses continued to operate as normal, it added.

The company said the issues identified in the audit were distinct from the need to increase reserves, in response to increased bodily injury claim trends, that was announced in its trading statement on November 5th.

The market consensus for profit after tax for this year stood at around £330 million, a spokeswoman said, and the downgrade was expected to take the market consensus for profit after tax down to about £280 million.

Adrian Brown, currently chief executive of the UK and Western Europe, would take over as acting chief executive of the Irish business, it said.

Reuters